Tuesday, 27 January 2015

Reactions to Singapore Perspective 2015: Choices

I had two objectives.

Firstly, to listen to the "Three Wise Men" of Singapore: Janadas Devan, Bilahari Kausikan, and Kishore Mahbubani.

Secondly, to get a little bit of History of Singapore. I am a history buff, after all.

I was not (too) disappointed then by Singapore Perspective 2015.


But I thought the staged debate on the motion "That Pragmatism should be retained as Singapore's governing philosophy" was rather poorly done.

It is the way of debates by celebrities.

School debates are actually better because the debaters are grounded in the structure - define your terms, define your objectives, define your ground, defend your ground.

With celebrity debaters, one doesn't want to constrain their flair, their personality, their entertainment value, so one gives them more leeway. Instead of structure, we hope to see more style. Instead of facts, we want to see more flair, more flourishes, more fun.

So "Pragmatism" was not really defined, and the proposition did not establish a "trophy" ground that they opposition must challenge or take down, and the opposition's counter was simply, "pragmatism is important, but it cannot be the sole governing principle. It should be balanced."

[I should also say that I am a debate buff/fan too.]

Halfway thru the tedious debate, I had revised the motion: That Pragmatism is the UNSPOKEN governing philosophy of ALL government.

You see, all governments operate from a principle of pragmatism. But most government learn to couch their pragmatism in more diplomatic terms, more palatable terms - like freedom, or democracy.

So it it Operation Iraqi Freedom, not Operation Iraqi Liberation (OIL).

And it's to bring Democracy to the Iraqis, not to bring Oil to the US.

And the US is a champion of human rights and civil liberties, and due process, never mind Guantanamo Bay and Abu Ghraib.

Only Singapore is dumb enough to state fecklessly, that we are being pragmatic.

We do so when we deal with th US. That's why they say we have a transactional mindset and we practice "selective cooperation" depending on the issue.

In other words, pragmatic.


What was interesting was the confederation option that was considered briefly in late 1964, early 1965, that Janadas Devan shared.

There were some details that were not covered in the news report.

[Afternote: Janadas Devan's full speech was reprinted some days later.]

In brief, SG joined the federation because the wisdom then was that a small country/ city-state (like SG) could not survive on its own. Malaysia was to be our hinterland.

But Goh Keng Swee was to realised that MY was not going to allow SG access to the hinterland after some negotiation and discussion with his MY/federal counterpart. He asked an IMF (? or UN?) economic consultant, what would be the outcome if MY denied SG access to the hinterland. The consultant presciently predicted the break-away of SG.

KL was also to have veto power over SG's external agreements. EDB wanted to offer pioneer tax statuses to foreign investors/companies to entice them to invest in SG. KL only approved 2 of the 62 applications sent to them. And one of the "Approval" had so many restriction it was as good as a rejection.

The British scuttled the talk of confederation, and in any case the terms of confederation were obliquely tilted in KL's favour. Symmetrically, it should have been that SG would not contest in any Federal elections, and KL would stay out of SG's politics. However, KL wanted to represent the Malays in Singapore, and be able to set or influence policy in SG for the Malays. Secondly, SG would be required to remit a portion of our tax revenue to KL, but SG would not be represented in the Federal Parliament.

"There would be no taxation without representation," LKY declared.

These terms would in effect make SG a colony of Malaysia.

It was unacceptable.

The PAP leadership then renewed their attempts to push for a "Malaysian Malaysia" (as opposed to UMNO's "Malay Malaysia") and this eventually led the Malaysia PM to decide on separation as the "safer" course.


Bilahari Kausikan was in fine form and highly entertaining and educational. His speech is reprinted in whole, although I seem to recall him saying more, but perhaps that was during Q&A.

His speech though will probably not cut any ice with the fuzzy logic Singaporeans - you know, those who conflate "information with opinion and treating both as entertainment."

But "Sovereignty" is a subject without much scope for discussion. Bilahari did a good job making it entertaining and engaging, but what else is there to say about "sovereignty"? Sovereignty is like virginity, you either have it or you don't. Talking about it just make you seem like a pervert (or a person with an overabundance of time to spend on immaterial semantic pursuits).

[Sorry, I'm channeling Bilahari, I think.]

Income Inequality and Globalisation

I am waiting for IPS to put out the slides used by Prof Tan Kong Yam - there are some very informative slides and statistics. A chart showed that the income in the lower 50% basically stayed flat from 1996 to 2012, whereas those in the top 20% increased significantly.

The conclusion of his presentation is that we should have some kind of help for the lowest 30% of our people.

[Update: here is Prof Tan's presentation slides.]

Fact Check

Speaking of which, during the Q&A with DPM Teo and Minister (SF) Chan Chun Sing, Chan told of a meeting with a group of SC who were asking for more subsidies. He then asked the group how many of them had to pay income tax, and apparently everyone in the room paid income tax.

Chan's point was that only the top 30% of income earners paid income tax. As such, his conclusion was that the room was full of those in the top 30th percentile.

I have been trying to check this fact, but the best I can find is a blog post in which Minister Shanmugam is quoted as saying that the top 20% pays 84% of the taxes.

I seem to recall that ministers had made similar claims in the past (that only the top X% pays taxes).

Which doesn't quite ring true for me.

Shanmugam's statement (if quoted correctly) makes a little more sense - most of the taxes are paid by the highest income, which is fair. But middle income earners also pay some income tax.

Once your chargeable income exceeds $20,000, you are liable for tax, even if it is a few dollars. In many of the previous years, there were tax rebates, but the most generous was a 50% rebate (and only for those over 60 yrs old), with 20%-30% for the general population.

With deductibles/relief, your assessable income could go up to $30,000 before being brought down to $20,000, and so pay no taxes. However, an  annual salary of $30,000 translates to the 41st percentile.

So Chan may still be right (his story was about providing for the lowest 30 percent of income), and if everyone in the room was paying income tax, it means that they were at least at the 40th percentile or higher. Which means help for the lowest 30% would not help them.

However, it is probably not true that ONLY the top 30% or even 40% pays income tax.

The table below shows that there are about 1.4m tax payers (resident). If this is the top 30%, that means in the empty box next to "$20,000 & below", there should be 2.8m people. Which is obviously not possible.

The top 20%+ would be those with assessed income of over $100k.

Assessed Income Group
Number of Taxpayers
Tax Resident
Non-Tax Resident
20,000 & below
20,001 - 25,000
25,001 - 30,000
30,001 - 40,000
40,001 - 50,000
50,001 - 60,000
60,001 - 70,000
70,001 - 80,000
80,001 - 100,000
100,001 - 150,000
150,001 - 200,000
200,001 - 300,000
300,001 - 400,000
400,001 - 500,000
500,001 - 1,000,000
1,000,001 & above
Source: IRAS

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