COMMENT: Is the “Singapore Dream” an elusive one?

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Shah Salimat is the editor-in-chief of culture news website Popspoken. He tweets at @firdianshah1. The views herein are not representative of his personal and professional affiliations.

The recently-announced Budget introduced a slew of measures targeted at strengthening safety nets for the lower- and middle-income groups, empowering businesses to continue restructuring efforts and gain independence from manpower issues. It also sought to encourage lifelong learning through financing continuous training.

Yet, nonchalance among some Singaporeans was worrying. Have we stopped keeping track of our government's finances? Why was there a lack of curiosity to analyse the Budget -- was it caused by the lack of additional cash "hongbaos"?

Had Singaporeans become apathetic to how its government spends? Marred by the chase to stay afloat in the world's most expensive city, some Singaporeans -- going by the comments online -- balked at the lack of support given to ease current-day concerns of high food costs, pricey housing and stacks of medical bills.

Why were they glum? Has the struggle to live erased the ambition to dream?

Once upon a time, Singapore was a country obsessed with chasing after the oft-maligned, materialistic 5Cs -- cash, credit, car, condominium and country club membership. The dream seems to be slowly slipping away, given grouses that high vehicle licenses and house prices have chipped away at disposable cash and personal credit risks.

And yet, finance minister Tharman Shanmugaratnam said that real incomes have risen -- he claims today’s median pay at $3,770 in June 2014, is some six times higher than in 1965.

But when you factor in the more than 27,000 new millionaires in Singapore since 2007 who have driven up the median statistic and a17-point jump in the Consumer Price Index since 2009, those reported wage increases may seem questionable.

Dreaming across generations

Across diverse groups, ambitions to climb social strata are as diverse as their needs and wants. For the young getting into schools and into their first jobs, landing their first paychecks marks the start of retirement planning and the ability to start enjoying the little luxuries in life.

Information on how much the bottom 25 per cent of polytechnic and Institute of Technical Education (ITE) graduates are earning as monthly starting salaries is not available on government channels but fresh Nitec graduates’ median starting salaries hover slightly below the $1,400 mark in 2013. Post-National Service graduates earn slightly below $1,700 in 2013.

Polytechnic fresh graduates had mixed numbers, depending on sectors. Although almost nine in 10 health sciences fresh graduates’ were employed in 2013, only four in 10 fresh graduates in media found employment. Can a reported median gross salary of $2,000 in 2013 feed a young family and a young person’s dream of obtaining that condominium and car?

For the working class, financing livelihoods is important to ensure stability on major-ticket payments. Median monthly household income stood at around $8,200 last year, according to official government reports.

Household income, while being a statistic that does not reflect the asset-rich and cash-poor, does put starting salaries in perspective. All ITE fresh graduates’ starting pay puts them just around the bottom 20th percentile of household incomes in 2014. In that same year, two out of every 10 people in this percentile own a car and seven in 20 people live in a 4-room HDB flat.

With a median gross monthly income of $3,770 -- not far off from most university graduates’ starting pay -- after offsetting housing, transportation, insurance, investments and daily family expenses, the possibility of having enough to save and spend on little luxuries can be quite low. In fact, some Singaporeans surveyed believe double of that median income is needed to survive in Singapore.

Retirement adequacy was something the government addressed on a major scale in this year’s Budget. From upping cash handouts to increasing employer contribution rates on Central Provident Fund (CPF) accounts, there was plenty to look out for those in their golden years. While this goes some way in easing burdens, the heavy CPF withdrawals from housing, medical and education in early age already take away what is a savings plan in case all money goes kaput before retirement.

It would be disingenuous to ask the government to purposely dole out cash payments for citizens to spend on their wants. But minister Khaw Boon Wan remarking that only a $1,000 salary is needed to finance a house signals the government’s financial planing skews towards necessity. Where is the financial freedom in that?

A new set of rules

Peruse Facebook comments on Budget posts by media channels and a common thread sticks out: no more handouts, if that means social spending and subsequent taxation will rise. The government has indeed signalled a direction away from handouts into more long-term social spending but this means recalibration is needed.

Depending on dual-income families working long hours and leaving children care to after-school operators (or worse, the ways of the street) is not an ideal circumstance for family bonding. Avoiding necessary evils is imperative if we are to move forward as a society with a healthy life outlook and happiness index.

Lowering living costs is not an easy when the Goods and Services Tax (GST) is estimated to rake in some $10.5 billion in FY2015 to fund social spending -- $1.6 billion more than proceeds from personal income tax. But if support schemes will not be a free-for-all, then support will first begin with oneself.

The definition of working is changing with the boom in entrepreneurship. For those who are leaving jobs with salaries that are not rising fast enough, the myriad of support systems in place to help small and medium-sized enterprises is a step away from climbing up the ladder to earn that big paycheck. Will job ownership spark greater happiness than the materialism of today?

Boosting productivity comes with workflow automation and should ideally lead to work-life balance in the form of flexi-work arrangements. These are all in place and can be pushed further. The Productivity and Innovation Credit and Wage Credit Scheme are laudable schemes to offset business costs and invest in technology and these should show in workers’ salaries, attitudes and working hours. The lack of gain in that area shows much more can be done.

Recalibration will also have to come from the government. Besides suggesting to spend more from reserves investment returns, the SingFirst political party proposes a phasing-out of the GST through tax restructuring so as to reduce the impact on the middle-class, by introducing 3-percent taxes on payroll and good-class bungalows as well as a CPF equalisation levy on employment-pass holders.

The levy implies that the if the employer were to pay 17 percent of a worker’s salary into his CPF, it would then give that same amount to the government for the number of employment-pass foreign workers employed. At the risk of hurting foreign worker inflow is that one basic question: change now or hurt later?

Whether recalibration will materialise will depend on seismic changes in attitudes. Minister Tharman said at his Ask The Finance Minister televised forum that Singaporeans must help each other out if we are to survive as a nation. Redistribution and collectivism is key for progress.

Flexibility, inclusivity and grit will form tenets of building a better Singapore -- if those recent advertisements by Gov.sg are anything to go by. But in that lies one key change in success in this little red dot: compassion. A heart for those around us, a heart to plan beyond survivability, a heart for a new way to do business. Social entrepreneurship is a major headway by Singapore startups and the spirit of giving should permeate through much of society.

Once the nation sees success as a step away from the rat race and the government sees that as many of its people can not just survive but flourish in this little red dot with big ambitions, success in Singapore can be redefined.

Then, can we finally begin to dream again for a better tomorrow.

@yahooSG on Twitter and Facebook


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