By Freda Peh
Early last month, Singaporeans were outraged by a middle-income family seeking financial aid from the government ahead of Budget 2018. The family featured by the New Paper claimed to be “suffering to make ends meet”, despite drawing a five-figure income.
Their expenses included payment for sailing lessons and private tuition for their children, in addition to hiring a maid.
Many were livid at the family’s request for aid. The public accused the family of already enjoying privileges that were out of reach for most.
While the article placed a spotlight on the extravagant lifestyles of some Singaporean families, it is easy to miss the point that middle-income families may actually be struggling to survive in Singapore.
The overlooked “middle”
In 1987, then Prime-Minister Lee Kuan Yew declared Singapore a “middle-class society”. He took pride in the fact that Singapore was not plagued by class distinctions like occupation, education level and lifestyle.
However, the rise of inflation in the following decades have surpassed the rate of increase in income for many families.
This has resulted in a middle class “squeeze”, as argued by Associate Professor Ho Kong Weng in Middle Class in Singapore: Security or Anxiety? published by Institute of Policy Studies (IPS) in 2014.
Since we usually use nominal income, or dollar amounts, to judge if a family can sustain itself comfortably, the struggles faced by middle-income families are less obvious.
This is because this marker fails to account for the effects of inflation, as well as the financial constraints of individual families with young school-going children or healthcare dependents.
Swept under the rug
In contrast, lower-income groups receive subsidies such as GST offset packages, health subsidies and workfare supplements. For instance, children in government-aided schools are eligible for bursaries if their gross monthly household income does not exceed S$6,000.
On the flipside, a Global Wealth Report by Credit Suisse Research Institute found that in 2017, the number of millionaires in Singapore rose 2.7 per cent to 152,000, owning a total wealth of US$570 billion (S$748 billion).
That leaves us with the middle-income, and the assumption that these families can take care of themselves.
At a 2015 People’s Action Party rally, Deputy Prime Minister Tharman Shanmugaratnam acknowledged that “the middle class pays very high taxes so that everyone gets something. It’s a very expensive system for the middle class — not just for the rich.”
It is especially taxing for families in the lower end of the middle-income bracket — because they earn just enough to cross the income threshold, they do not receive welfare subsidies.
Assistant Professor Woo Jun Jie from NTU’s School of Social Sciences said that the government is not incentivised to provide the middle class with additional aid, because the poor and vulnerable of society require more assistance.
However, with the impending consumption tax hike announced in the 2018 Budget, these families will likely be hit hard.
This makes lower-middle-income families with healthcare dependents and young dependents most susceptible to falling into the lower-income bracket, Prof Woo noted.
A re-evaluation of priorities
The expectations of excelling in our meritocratic system also adds to the strain.
Every parent would want their child to do well, even if it means spending beyond their means. Shelling out for tuition is seen as a necessary investment in a child’s future.
The number of middle-class families seeking temporary financial aid are on the rise, noted Principal Social Worker Petrine Lim Puay Leng of Fei Yue Family Service Centre (FSC) in the same IPS paper.
She also noted that even though they struggle to finance their children’s education, these families find it difficult to meet the criteria of potential subsidies such as the Straits Times School Pocket Money Fund.
So it seems The New Paper could have picked a more suitable family to feature, to truly highlight the plight of the middle class. By choosing a family that seemed neither representative nor relatable to many Singaporean families, this has diverted the discussion towards the lifestyle choices made by that one family.
It is time to throw a spotlight on the real struggles of middle-class families.
Society needs to re-evaluate its tax markers to address not just low-income families, but also families with healthcare burdens that feel systematically disadvantaged by the system.
With higher living costs and greater income inequality, more families will likely feel the squeeze on their already tight financial budgets.
As a society, we should try to understand and address these deep-seated systemic problems, rather than sweep them under the rug.