Singapore Management University Institutional Knowledge at Singapore Management University Lien Centre for Social Innovation: Research Lien Centre for Social Innovation 3-2015 A handbook on inequality, poverty and unmet social needs in Singapore Catherine J. Smith John A. Donaldson Singapore Management University, [email protected] Sanushka Mudaliar Mumtaz Md Kadir Singapore Management University, [email protected] Lam Keong Yeoh Follow this and additional works at: https://ink.library.smu.edu.sg/lien_reports Part of the Asian Studies Commons, Social Policy Commons, and the Social Welfare Commons Citation Smith, Catherine J.; Donaldson, John A.; Mudaliar, Sanushka; Md Kadir, Mumtaz; and Yeoh, Lam Keong. A handbook on inequality, poverty and unmet social needs in Singapore. (2015). Social Insight Research Series. 1-86. Lien Centre for Social Innovation: Research. Available at: https://ink.library.smu.edu.sg/lien_reports/10 This Report is brought to you for free and open access by the Lien Centre for Social Innovation at Institutional Knowledge at Singapore Management University. It has been accepted for inclusion in Lien Centre for Social Innovation: Research by an authorized administrator of Institutional Knowledge at Singapore Management University. For more information, please email [email protected]. Lien Centre for Social Innovation Social Insight Research Series A Handbook on Inequality, Poverty and Unmet Social Needs in Singapore A Handbook on Inequality, Poverty and Unmet Social Needs in Singapore Lien Centre for Social Innovation CATHERINE J. SMITH (Additional research and writing by John Donaldson, Sanushka Mudaliar, Mumtaz Md Kadir and Yeoh Lam Keong) As this handbook is intended to provide an overview of the arguments of others, the role of the authors largely consisted of compiling, arranging, and contextualizing. Further, the ideas expressed herein, which are various and often contradictory, do not necessarily represent the views of the handbook’s authors, or of the staff and Board of the Lien Centre for Social Innovation. Copyright © March, 2015 by Lien Centre for Social Innovation. All rights reserved. Published by the Lien Centre for Social Innovation Singapore Management University, Administration Building, 81 Victoria Street, Singapore 188065 www.lcsi.smu.edu.sg No part nor entirety of this publication may be reproduced or transmitted in any form or by any means, or stored in any retrieval system of any nature without the prior written permission of the Lien Centre. Readers should be aware that internet websites offered as citations and/ or sources for further information may have changed or disappeared between the time this was written and when it was read. Limit of Liability/Disclaimer of Warranty: While the publisher and authors have used their best efforts in preparing this publication, they make no representations and/or warranties with respect to the accuracy and/or completeness of the contents of this publication and specifically disclaim any implied warranties of appropriateness, merchantability and/or fitness for any particular purpose. No warranty (whether expressed and/or implied) is given. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional, as appropriate. Cover and text design by Typewriter Media ISSN: 2010-3417 ISBN: 978-981-09-4135-2 Printed by C.O.S. Printers Pte Ltd Contents Foreword v Acknowledgements vii List of Abbreviations viii Executive Summary ix Introduction & How to Read this Handbook 1 Part I: The Current Situation 3 Section A: Inequality 4 Section B: Absolute poverty 14 Section C: Relative poverty 17 Section D: The squeezed middle class 17 Part II: Literature on the Causes of Inequality and Poverty in Singapore 19 Section A: Tracing the roots of inequality and poverty in Singapore 20 Section B: Tax policies to support growth 24 Section C: Meritocracy 26 Part III: Intersections with Poverty 31 Section A: Gender 32 Section B: Race 39 Part IV: Existing Policies 41 Section A: Many Helping Hands 42 Section B: Central Provident Fund 44 Section C: Housing and Development Board 46 Section D: Health financing 48 Section E: Workfare 49 Section F: Tax incentives 50 Section G: Public assistance 50 Section H: Non-profit organisations 51 Part V: Suggested Avenues for Reform 53 Section A: Tweaks to the system 54 Section B: Recommendations for broader changes 58 Conclusions 59 Endnotes 64 For Further Reading 82 Foreword On behalf of the Lien Centre for Social Innovation, I have great pleasure in introducing what we think is an unprecedented publication—one that reviews the growing body of research that leads to the understanding of poverty and socio-economic inequality in Singapore. We are gratified that there has been increasing recognition and positive actions by government and the civil sector to address the challenges faced by low-income Singaporeans—a diverse group of people with a diverse set of needs. Without taking anything away from these good efforts, the fact remains that these problems are still poorly understood. We have heard from leaders of voluntary welfare organisations, teachers, students, members of the media, government partners and members of the public that they wish for a publication that collects, summarises and analyses some of the latest research and debates regarding poverty and inequality here in Singapore. I am delighted to say that we now have it. It is the vision of the Lien Centre for Social Innovation to be a thought leader and catalyst for positive social change in Singapore and beyond. We hope this publication is informative and serves as a guide for the on-going discussions and planning for how to- gether, we can manage these vital issues in Singapore. Dr Tan Chi Chiu Chairman Dr Tan Chi Chiu The board members of the Lien Centre for Social Innovation include: Laurence Lien Professor Arnoud De Meyer Professor Steven Miller Professor James Tang Associate Professor Ong Siow Heng Crystal Hayling Watanan Petersik Viswa Sadasivan Tan Bien Kiat Chris Cusano David Hayward Evans Jacqueline (Jackie) Wong Tim Oei v Acknowledgements A Handbook on Inequality, Poverty and Unmet Social Needs in Singapore was written by Dr Catherine J. Smith for the Lien Centre for Social Innovation (LCSI), with additional research and writing by Mumtaz Md Kadir (LCSI Assistant Manager – Research and Programmes), Sanushka Mudaliar (LCSI Senior Manager, 2012 – 2014), Associate Professor John Donaldson (LCSI Senior Re- search Fellow) and Yeoh Lam Keong who contributed at every stage to the writing and reviewing of this handbook. The handbook was further designed and developed by the team of authors over the course of 2014. Special thanks to LCSI Director Jonathan Chang, and LCSI staff Jenny Huq, Carol Candler, Shirley Pong and Jared Tham, as well as the LCSI Board for their support and assistance from their inception of this research project; Yeoh Lam Keong for his original research and overall contribution to this handbook; Wu Biqi for her research assistance to our initial publication on the related topic Measuring Poverty in Singapore – Frameworks for Consideration (Social Space, Issue 6, 2013/2014, LCSI); and Jacqueline Loh (LCSI Director, 2010 – 2013) for initiating LCSI’s research into poverty in Singapore. We are very grateful for the detailed comments and suggestions provided by: • our roundtable participants, including Au Yong Haw Yee, Bernadette Lau, Vignesh Naidu, Tang Lay Lee and Vivienne Wee; • our team of reviewers, including Mukul G. Asher, Au Yong Haw Yee, Crystal Hayling, Hui Weng Tat, Donald Low, Steve Miller, Vignesh Naidu, Irene Ng, Tim Oei, Vernie Oliveiro, Tan Chi Chiu, Tan Meng Wah, Tang Lay Lee and Teo You Yenn; • and a group of experts who provided advice along the way, through various interviews and other correspondence, including Au Yong Haw Yee, Donald Low, Vignesh Naidu and Soh Tze Min. vii List of Abbreviations AHEBN: Average Household Expenditure on Basic Needs AWARE: Association for Women for Action and Research CPF: Central Provident Fund DOS: Department of Statistics, Singapore EIU: The Economist Intelligence Unit FSC: Family Service Centre FDW: foreign domestic worker GIC: formerly Government Investment Corporation, now GIC Private Limited GST: Goods and Services Tax HDB: Housing and Development Board HES: Household Expenditure Survey LCSI / Lien Centre: Lien Centre for Social Innovation MOE: Ministry of Education MOF: Ministry of Finance MOM: Ministry of Manpower MSF: Ministry of Social and Family Development NPO: non-profit organisation OECD: Organisation for Economic Co-operation and Development PMETs: Professionals, managers, executives and technicians PR: permanent resident PSLE: Primary School Leaving Examination SSO: Social Service Office VWO: voluntary welfare organisation WIS: Workfare Income Supplement viii In reviewing and compiling the literature, the authors hope to make such research more accessible to a wider audience, which ‘ includes policy-makers, social service organisations, social enterprises, journalists, academics, advocates and the community at large. EXECUTIVE SUMMARY A Handbook on Inequality, Poverty and Unmet Social Needs in includes policy-makers, social service organisations, social en- Singapore reviews existing research on the topic. While it does terprises, journalists, academics, advocates and the community not claim to be a comprehensive compilation, the handbook at large. In addition to the organisation and classification of the features major