Singapore’s poor says Budget “only sweet to the ear”

Rachel Lim
16 Feb 07

When Singapore’s finance minister took the floor of parliament to deliver the national budget, Lim Meng Seng hoped he could spare a little cash for people like him.

Sitting on the kerb in Chinatown with a trolley full of cardboard pieces in front of him, Lim is among those left behind by the city-state’s economic boom.

Low-wage earners such as Lim have become an increasing concern to the government, which warned Thursday of a widening income gap and announced budget measures to help the less fortunate.

Lim, 50, said he was laid off from a better-paying hotel job six years ago and now tries to make ends meet by juggling two jobs.

At night he helps out at a food stall, earning 700 dollars (458 US) a month. If he is lucky, he makes another 100 dollars (65 US) a month collecting cardboard boxes during the day and selling them to recycling companies.

“I was thinking that the government should give me some extra money because I am from the lower income group. I have financial difficulties,” said Lim, father of a school-age child.

Official statistics released this week showed that average monthly income per person, adjusted for inflation, increased across all income levels last year but rose fastest for the wealthiest 10 percent.

“Income gaps are widening,” Second Finance Minister Tharman Shanmugaratnam said in his budget speech.

A “Progress Package” of government handouts last year was weighted in favour of lower-income groups and helped reduce that disparity. Among the package was about 400 million dollars in “workfare” bonuses to the elderly and low-income wage earners.

Workfare will now become permanent, with an annual 400 million dollar supplement for low-income workers, Shanmugaratnam said.

He also announced an increase in the tax on goods and services (GST) from five to seven percent and a cut in corporate tax.

Many low wage earners interviewed ahead of the budget said the government should give a bigger hand to the poor, especially in the face of the GST increase and what they describe as the rising cost of living.

Lim said he received 300 dollars under last year’s “Progress Package” but could use more.

“They should give more money on a monthly basis and also cut down public utility bills, town council bills and telephone bills,” he said.

H.S. Lee, a cleaner earning 650 dollars a month, said a GST increase will hurt the poor.

“With more GST, it’s not fair. Eating, taking the bus and even buying clothes all would mean higher expenses. How would I have enough?” she asked.

Lee, who supports two children, expressed doubt that any incentives offered in the budget would ease her burden.

“Any extra offset packages given will be used to pay off the higher food, transport and other costs. The package is only something sweet to the ear, but it won’t be much help in reality,” she said.

Workfare supplements the incomes of older low wage earners, but some Singaporeans are not working at all.

The government said Wednesday that unemployment was 2.6 percent in December, and the consumer price index rose 1.0 percent last year.

R.J. Deng, 55, said he has no steady job but picks up 20 or 30 dollars a day, when he can, by collecting old newspapers and cardboard boxes to sell.

He said that if the GST goes up, “it is only good for the government and driving competition among businesses. The lower income group will be badly affected.”

Lee Sui Chor, 69, a diabetic who had a leg amputated, said he is supplementing government benefits with his personal savings of more than 1,000 dollars.

“How long will it last? My retirement fund monthly payout of 297 dollars from the government is not enough to feed myself, pay for rent and visit the doctor,” said Lee, who lives with his mentally ill brother in a one-room flat.

“The government say they would help the elderly. I don’t really see it. It’s not even here yet,” Lee said.

Singapore officials on Wednesday reported better-than-expected 7.9 percent economic growth last year and Thursday’s budget speech widened the social safety net.

But the government has ruled out ever adopting the generous welfare systems for which Scandinavian countries are known.

Singapore’s poor, like the cardboard collector Lim who works two jobs, are uncertain whether their lives will get better.

Lim worries the money he has put into a government-backed saving scheme will be sapped to pay for his housing, as well as for medical care as he ages.

“And there’s nothing left in the end,” he lamented.

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