Debate on Annual Budget Statement 2022

MP Leon Perera

Mr Leon Perera (Aljunied): Mr Speaker, Sir, I would like to start by referencing a memoir written by Ms Liyana Dhamirah called “Homeless”. Ms Liyana’s memoir traces her journey as a young mother sleeping rough in “crazy rich” Singapore. She eventually got back on track with the tenacity to fight stigma, with support from social workers and a spot of luck with generous friends. There are many people in Singapore like Liyana who have pulled themselves up to thrive.

But, Sir, my Budget speech this year is not about individual actions. It is about ensuring our policies are designed to substantially reduce poverty and decisively break the poverty cycle for all children born into poor families.

Sir, Budget 2022 does provide some benefits to lower-income groups. However, I will argue that we need to substantially improve access to support in three ways.

First, access to support for the well-being and dignity of the poor. Second, access to programmes that give a leg-up to children in poor homes. And third, access to employability support for those at risk of being stuck in low-income jobs or long-term unemployment. Such support should be provided in a holistic, results-oriented way. 

NGOs, volunteers and ground-up charitable initiatives all have a role to play. But they should not be doing the heavy lifting when it comes to funding action against the root causes of poverty. They should be providing the “heartware” to help those who need it , while we maintain a strong baseline of state support on top of which NGOs and the community can layer personalised effort, expertise and passion. 

As a country, we have stood up to national challenges like the threat to our water supply and the COVID-19 pandemic.

A major effort to wage war on poverty is not just something we can afford – it is something we must do. Our pledge to build a society based on “justice and equality” calls on us to act. But beyond that, investing in additional anti-poverty and early intervention action for poor children may reduce the incidence of persons needing social welfare support in future. Such investments may unlock talent for our economy, which would raise GDP and the tax base.

The World Economic Forum’s inaugural Global Social Mobility Report 2020 estimates that if Singapore is able to increase its performance by 10 points on the index, the resulting growth would add S$3.2 billion to our economic output every year.

In this sense, investing in anti-poverty action is like making adult vaccines free – it may more than pay for itself in the longer-term.

Last and most importantly of all, a war on poverty would strengthen the foundations of social solidarity in our nation and help realise the promise that we truly have everyone’s back.

One response to what I have said thus far would be – well, we are already waging a war on poverty, we are already doing it. We have programmes like ComCare, KidSTART, Workfare, Silver Support, the work of bodies like MENDAKI, CDAC, SINDA and so on and so forth.

But let us take a look at some of the objective evidence.

In Food Bank Singapore’s 2020 Hunger Report, 10% of Singaporean households experienced food insecurity at least once in the last year. Two in five experienced it at least once a month. I do meet some Singaporeans who experience food insecurity when we engage constituents, as, I am sure, do other Members of this House.

In a Parliamentary Question reply, I was told that even as Safe and Sound Sleeping Places run by community partners were scaled up in 2021. Their utilisation rate was 93%. This is a rate our hotels would be envious of.

From another Parliamentary Question reply, I learnt that we have about 4,000 children living in 1-room rental flats and about 18,000 in 2-room rental flats. I estimate that this means that the average living space per child in such flats is just 10 square metres, 60% less than the average living space per person in Singapore.

Research by academics led by Prof Ng Kok Hoe and Prof Teo You Yenn concluded that a single elderly person realistically needs a minimum of around $1,400 per month for basic necessities and $6,400 per month for a family of four. Yet 100,000 people in our local workforce earns a gross income of less than $1,300 per month. I do not have a figure for the families of four or more earning less than $6,400 per month but it must be significant.

The last Household Expenditure survey shows that on average, households in the bottom 20% spent more than they earned.

On social mobility, the available data shows a worrying trend. A 2019 MOF study of intergenerational income mobility found a high degree of mobility for those aged 44 to 53 today. However, this generation came of age at a time of rapid expansion of the economy. Younger Singaporeans today face a completely different set of challenges, such as high housing prices and high income and wealth inequality.

One study by Prof Irene Ng, based on a 2002 survey dataset concluded that 58% of the income advantage of Singapore parents was being handed down to their children, a level similar to the USA at that time. In 2015, the Principal of Raffles Institution said that the school enrolment was exhibiting a class skew that it did not have in the past.

Some baby boomers made a windfall from property and this shows in our parallel problem of wealth inequality. My colleague, Sengkang Member of Parliament Mr Louis Chua has spoken about wealth inequality and cited quite a few data points which I would not repeat here.

But we also need to look beyond statistics to the lived experiences of Singaporeans to fully understand why this matters. A 2018 CNA survey found that it was class and not race or religion that was the most divisive factor in Singapore. It also found that those who identified as upper class were more likely to feel a greater sense of belonging and national pride than those who identified as lower class.

In a 2018 poll by Blackbox Research, seven in 10 Singaporeans felt that income inequality in Singapore had worsened over the past five years, with youths and young working adults more likely to feel anxious about the unequal distribution of income.

Sir, let me now move to specific policy calls.

Before I begin, to set some context, the assistance that is provided to the poor is not always channelled through a one-stop shop. Assistance schemes and ad hoc help are available from different agencies and the process of navigating this ecosystem can be stressful and daunting.

In fact, the Government’s “kueh lapis” approach of multiple lines of assistance may, in fact, levy an unnecessary bandwidth tax on the poor when they seek help. “Bandwidth tax” refers to the additional cognitive burden they face. To get support from multiple schemes, they personally have to fill up paperwork, produce documents, attend meetings and meet deadlines. And because they struggle, their cognitive functioning is impacted and they may make what many others see as “poor” decisions. As a result, they become entangled even more deeply in the poverty cycle. One study found that the bandwidth tax due to poverty can be the equivalent of 13 to 14 IQ points.

Poor families would benefit from having one window for state support and also to have that support be scaled up and follow more of a results-driven, account management approach.

Sir, let me now expand on my recommendations for poverty alleviation and employability support.

Firstly, we should increase the accessibility of state schemes. I will suggest four ways to do this.

The first involves us currently having too many financial assistance schemes that confuse and overwhelm their applicants. These include CDC vouchers of various kinds, ComCare and the Pioneer Disability Fund, for example. We should aim instead to minimise the number of scheme distributors and not have applicants being referred from one organisation to the next.

What I propose is that all state schemes be funnelled through a central account manager, with one such manager paired to each poor family. Social workers at Family Service Centres (FSCs) seem to me to be best placed to play this role. These account managers should be empowered to channel and administer all state schemes. They should also have visibility on schemes that are automatically administered, like Silver Support and Workfare so that they can also address issues or errors there and so that they can take a more holistic view of the family’s situation.

To mirror the one account manager for social welfare support, each poor family and low-income worker should have one account manager in charge of employability at WSG. That manager should be empowered and mandated to coach the worker to access the large array of work and training schemes. Their mandate should not merely be process-driven, meaning they should not be limited to training them on CV-writing techniques or asking them to sign up to passive job alerts. But they should also proactively work with their beneficiaries to assess different opportunities and find the right one, like a consultant and coach would do.

I have spoken in this House previously on how some state employability counsellors in some other countries take a results-driven approach.

An employability account manager for the disadvantaged would also be in a position to nudge their beneficiaries to upskill or reskill to move out of “at-risk” jobs before they are made obsolete. This recommendation is linked to my earlier call to expand the supply of such training and conversion places.

The second issue involves the current process for applying for financial assistance being too complex and exhausting. For example, the interviewing of family members by agencies in some cases in unnecessary. Some applicants are deterred from pursuing their Financial Assistance applications because the humiliation that they would feel if agencies call their relatives. I repeat my call for Financial Assistance to be provided based on declarations as to whether family support is being obtained without the need for interviewing family members and with strong disincentives associated with making false statements.

Next, when seeking Financial Assistance, ComCare Short- to Medium-Term Assistance currently gives assistance for an average of only six months. To avoid the uncertainty and stress that comes with having to renew the support every few months, a longer-term grant can be given, albeit tied to conditions which I will touch on in a minute. This addresses the disruption of some beneficiaries having their Financial Assistance suddenly cut off when they find a job or increase their pay beyond a certain threshold. There should be a certain runway where the Financial Assistance continues after such events to enable the beneficiary to settle debts, to adapt to the new income structure and so on. 

Next, on the Financial Assistance application process. Applicants are sometimes asked to produce various documents that they may no longer have. Some are asked to hold physical meetings at the SSO office, which can be very hard for them if they are taking care of young children or working. Can social workers visit beneficiaries more frequently at their homes, which would help them to better assess their living conditions? And this is a topic that I have raised before. Can we convince more beneficiaries also to grant the agency direct access to past records residing with banks or Government agencies so that the absence of documents does not become the impediment it often is?

Thirdly, let me address how we can increase the quantum of Financial Assistance available based on the beneficiary committing to positive actions that would help them and their family. More financial assistance can be provided beyond the current scheme caps, but tied to various conditions about which the welfare account manager is best place to decide.

These may include firstly, commitment to ensure attendance of children at early intervention programmes such as KidSTART, or attendance at school for families where absenteeism is an issue. This follows the Bolsa Família’s principle of conditional cash-transfers to poor families, which has had some success globally. And I note that in a Parliamentary Question reply that just came in, 2% of Secondary school students are tied up with absenteeism. 

Secondly, commitment to taking action on the employability front with training, job seeking and so on, and here the FSC and WSG account managers can coordinate.

Thirdly, commitment to healthy behaviour, such as going for health screening and adult vaccination.

Fourthly, commitment to attend personal life skills courses, for example, related to financial literacy.

In fact, some of the increased Financial Assistance can come in the form of digital currency that can only be spent on healthier food. At the Committee of Supply (COS), I shall elaborate on this and on child early intervention programmes to break the poverty cycle. 

Sir, my final topic on the administration of poverty relief would be the quantum of relief. More can be given with part of it being conditional as I have argued. Long-term ComCare gives individuals about $600 monthly, short- to medium-term ComCare gives a mean of $600 per household per month in FY2020, which works out to just under $270 per person per month. There are other schemes like the Workfare Income Supplement and Silver Support, but these also number in the hundreds of dollars per month. And not every person who is vulnerable accesses multiple schemes.

I am sure other Members of this House have had the same experience as I have often have, where persons approach me to plead for Financial Assistance and the case is referred to the SSO. A letter from the SSO sometimes follows, which states that in their conversation, the residents agreed that they were receiving certain state benefits already, and hence they have agreed to withdraw their application for Financial Assistance. However, the fact that they initially came to the Member of Parliament underlines that there is a difference of perspective on how much is enough.

In citing this, I want to be absolutely clear that our social workers and SSOs generally do their very best and do good work, but they operate within the policy parameters prescribed for them. 

Sir, I cited research earlier showing that income levels of $1,400 and $6,400 per month have been suggested to provide a very basic standard of living for a single elder person aged 65 and above and a family of four respectively. For those aged between 55 and 64, that figure increases to $1,700 per month.

Sir, I would suggest that there is scope to revisit and significantly increase the quantum, duration and conditions of welfare assistance we provide to better protect the vulnerable, particularly the children and unemployable elderly. We should address the issue of poverty in a results-oriented fashion and in way that takes into consideration new research when it becomes available.

To be sure, I am not suggesting that welfare assistance should be unlimited and unconditional in all cases, or that the levels should be so high as to make it unattractive to work. But as we apply progressive wage laddering, the quantum that makes work unattractive will rise and this should be reflected in our welfare schemes.

Sir, another suggestion I have is to enable poorer individuals to contribute back to society in a manner that might most befit their abilities by empowering them to become micro-entrepreneurs. A state-backed facility should be set up to provide micro-loans to poorer individuals to set up microbusinesses, such as home-based catering businesses, for example. The financial services industry is currently not set up to do this.

Many poor Singaporeans I know are willing to work hard and may have a passion or talent for something that could become a source of stable income, pride and self-esteem. Micro-entrepreneurship particularly among women, whom research has shown are more likely to share financial gains with their children, unfortunately, is a pathway to poverty alleviation that attracts a great deal of multilateral funding in other countries.

I would like to briefly repeat a call made by my colleague, Member of Parliament Mr Faisal Manup, to reintroduce the hardship scheme for hawker centre stalls. This could provide opportunities for the low-income and ex-offenders to pursue their aspiration to set up a hawker stall with subsidised rents.

Next, Sir, I would like to touch on the social work profession. Social workers are at the core phase of dealing with poverty. Many I have spoken to feel that many of our social workers feel overworked. And this was my sense too when I was an FSC volunteer in the 1990s. This is a subject that has been discussed in this House a number of times. We need to invest in more manpower and we need to ensure that compensation is well matched to the rigours of the job, which can be intellectually, socially and emotionally draining.

We can do more to set benchmarks for caseloads and increase headcount when these benchmarks are breached. Social workers will find it hard to help others if they are looking for help themselves. Social workers with sufficient capacity are the best people to provide advice and support on more complex issues and not just disburse money. They could be like venture capitalists, investing in people and also providing them with critical advice and coaching to help realise a return on that investment. In short, social workers can help people thrive. 

The last subject I would like to address in my speech is to call for the release of better data to tackle the issues of poverty and social mobility. Better data helps public debate and helps us figure out what works and what does not. And in tackling a problem that is complex and resistant to simple solutions as poverty is, such data is critical for performance management for the goals we have set. We need to invest in a rigorous measurement of inter-generational social mobility at least once every decade, a call I have made before. And a nationally recognised poverty line should be established, which could aid social workers in making decisions, a call made in this House by my colleague, then Non-Constituency Nominated Member Mr Yee Jenn Jong, in 2013. 

We should also keep data on child poverty, which is key to inter-generational poverty and which many other countries do publish. I propose that we track the inter-generational rate of reliance on ComCare Financial Assistance and rental housing. One head of an FSC who had been in the field for over 20 years told me that he was receiving cases of young families that were the children of cases he had handled as a young social worker. This is a poverty cycle we must break.

Thirdly, I would like to call for in-depth studies to be done, directed especially at younger poor Singaporeans to do deep root cause analysis of the reasons for poverty.

Lastly, we should aim to release more data by socio-economic status, including on health outcomes, educational attainment, new business formation and so on. Any relevant public survey of studies that relates to this should by default be published.

Sir, in waging war on poverty, there are many other policy tools we need in our arsenal that I will not have time to expand on and hope the conversation will continue. For example, my colleagues, Members of Parliament Gerald Giam and Assoc Prof Jamus Lim, have tirelessly spoken about minimum wages in this House. Member of Parliament Louis Chua moved and Adjournment Motion about expanding the supply of rental housing, while Member of Parliament Faisal Manap did the same on motorcycle COEs. Workers’ Party chair Ms Sylvia Lim has spoken passionately on social mobility. In this Budget debate, the Leader of the Opposition, Member of Parliament Ms He Ting Ru and other Workers’ Party Members of Parliament have argued for other policies that will help the poor and the vulnerable, including why the Government’s 28% GST hike is unhelpful and unnecessary, which is why the Workers Party cannot support the Budget. A 28% hike refers to the increase in GST rate from 7% to 9% – that is a 28% increase.

In conclusion, Mr Speaker, Sir, I would like to wrap up by asking a simple question. Is spending more and investing more effort in fighting poverty and breaking the poverty cycle really worth it? I understand that changing our mindset and paying to tackle poverty costs money. But we have done this before. In year one of COVID-19, almost 200,000 self-employed people were given $1,000 a month.

There will be returns from investing in a war on poverty and breaking the poverty cycle. If the help is provided in a results-oriented, holistic way, with sufficient dollars, there is every reason to believe that that spending will diminish over time and yield broader social and economic and even socio-political benefits, as more people improve themselves in terms of health, life skills, employability and – that most precious commodity of all – self-belief and confidence in themselves.

We must not judge our success solely on how much GDP growth we have achieved each year, but also by how much poverty we have eliminated. In recent years, it is unclear if we are making success on this front, with no real downtrend in demand for ComCare, rental flats and other assistance schemes. We must break this cycle and make a substantial dent on poverty.

Then and only then, can we truly claim to be living in a First World Country. Only then can we say that we live in a society that has everyone’s back.

2 March 2022

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