Photo credit: QUARTZ

[UPDATE] Crowdfunding Target Has Been Reached and Media Coverage

As of 16 April 2021, the target amount has been reached. Please read the update here.

Please see international coverage of the crowdfunding success at the South China Morning Post, The Online Citizen, AFP, Reuters, The News Lens (Chinese), WION (video news), WION (full Skype interview), WION (transcript of full Skype interview) Kompas.com (Indonesian), Taipei Times, The Independent Singapore and Thailand Daily.

A) Original Post: Crowdfunding Campaign to Raise Funds for the Money Singapore’s Prime Minister Demanded From Me

On the encouragement of friends and supporters, I revived my crowdfunding campaign on 7 April 2021 for the defamation suit I faced from Singapore prime minister Lee Hsien Loong. Please see below the details (under the section, ‘More On My Case’):

In 2014, I was sued by Singapore prime minister Lee Hsien Loong over an article I wrote on my blog, The Heart Truths. The prime minister said I defamed him. The courts agreed. In 2016, I was ordered to pay Lee S$150,000 (US$112,000) in damages. (Please also see in this link information on the previous funds raised for the fees and costs in relation the legal suit, and their usage. The previous funds have been paid out.)

For the past five years, I’ve been paying Lee S$100 a month, transferring money to Singapore while I live and work in Taiwan. Thus far, I’ve paid S$6,000. However, according to the payment schedule, I am supposed to start paying him S$1,000 a month from April 2021 onwards, until the full amount is repaid.

After deducting for the S$6,000, I still owe Lee S$144,000 (US$107,500)—according to this schedule, I’ll have to continue paying Lee in instalments for the next 12 years, until 2033. S$1,000 a month is a substantial amount of money; it is nearly half my current monthly salary.

Following the successful crowdfunding campaign of Leong Sze Hian—another Singaporean who the prime minister sued for defamation, and who raised S$133,000 in about a week-and-a-half—I have been urged by friends and supporters to start a new crowdfunding campaign to help me pay off the outstanding amount and get me out of this financial burden that has been hanging over my head since 2016.

The original announcement of this crowdfunding campaign can be found on both Facebook and Twitter:

• Facebook
• Twitter

If you would like to support my crowdfunding campaign, you can donate to:

• POSB Savings Account Number (Singapore) – 130-23068-7 (Ngerng Yi Ling)
• PayNow (Singapore): S8113784F
• PayPal – royngerng@gmail.com
• PayPal.Me Link: https://paypal.me/royngerng
• E.Sun Bank 玉山銀行 (Taiwan): Bank Code 銀行代碼: 808, Account Number 存戶帳號: 0886-968-170270

B) During the Crowdfunding Campaign: Updates on the Funds Raised

The crowdfunding campaign started on 7 April 2021, at 6.30pm.

To keep track of the funds raised during the crowdfunding campaign, twice-daily updates were posted on my Facebook profile, and a Google Sheet was created to keep track of the funds raised.

Please see below the previous daily updates on Facebook, together with the amounts raised for each day. I will continue to publish updates on my Facebook until the end of the crowdfunding.

• Day 0.5: S$12,444.07
• Day 1: S$24,121.53
• Day 1.5: S$37,941.57
• Day 2: S$45,627.42
• Day 2.5: S$57,542.45
• Day 3: S$66,892.86
• Day 3.5: S$73,776.83
• Day 4: S$78,505.33
• Day 4.5: S$86,562.74
• Day 5: S$91,945.86
• Day 5.5: S$105,402.77
• Day 6: S$111,605.45
• Day 6.5: S$119,450.77
• Day 7: S$125,206.26
• Day 7.5 (12pm): S$132,251.07
• Day 7.5 (3pm): S$135,523.85
• Day 8: S$137,544.69
• Day 8.5 (10.15pm): S$140,929.97
• Day 8.5 (12am): S$141,799.35
• Day 8.5 (8am): S$142,739.70
• Day 8.5 (11.45pm): S$144,389.14 (Goal is reached!)

You can also see in the link below the Google Sheet I have created to track the funds raised (the 1st tab shows the total amount raised, the 2nd tab shows the amount raised via the POSB Bank account in Singapore, the 3rd tab shows the amount raised via PayPal, and the 4th shows the amount raised via the E.Sun Bank account in Taiwan):

• Google Sheet

C) After the Crowdfunding Campaign: Thank You and Next Steps

Please also see below the thank you posts that I have written to thank the various groups of people for contributing to this crowdfunding movement:

• Main thank you post to people from all walks of life and across political spectrum for contributing to this crowdfunding campaign
• Thank you post to my colleagues for their patience during this crowdfunding period
• Thank you post to Milk Tea Alliance #MilkTeaAlliance countries in Asia for supporting this crowdfunding campaign
• Thank you post to people overseas inside or outside of Singapore for contributing to this campaign

Please also see below the follow-up steps after the crowdfunding campaign detailing how the funds raised were managed:

• On 8 April 2021, the first S$1,000 installment of the funds raised was transferred to Lee Hsien Loong.
• On 17 April 2021, my lawyer Eugene Thuraisingam wrote to Lee Hsien Loong’s lawyer Davinder Singh to inform of my intention to make a lump sum payment of S$143,000 (after deduction of the S$1,000 installment).
• On 17 April 2021, I outlined the detailed plan on the management of the excess funds.
• On 19 April 2021, I updated that my lawyer is in the process of applying to the courts for lump sum payment to be made to Lee Hsien Loong.

D) Background of the Crowdfunding Campaign: Singapore’s Prime Minister’s Defamation Suit Against Me

More On My Case

The article that I was sued for raised issues about transparency over the handling of Singaporeans’ pension monies by the country’s sovereign wealth firms (SWFs). The prime minister is chairperson of GIC, one of these SWFs. His wife is the CEO of Temasek Holdings, the other SWF.

While the prime minister sued me for one article, he also asked me to take down four other articles with similar content. While these articles are no longer online, I have referenced them on my blog here.

Two weeks after I was sued, I was fired from the hospital I worked at. The hospital released a public statement on my firing, saying that my “conduct was incompatible with the values and standards” expected of employees, because I “defame[ed] someone else without basis”. The Singapore Ministry of Health followed by issuing a separate press release supporting the hospital’s decision repeating the same statement.

After I was sued, it became impossible to look for a job both among multinational companies and small businesses. They were scared of employing me for fear of offending the Singapore government. My difficulties in seeking employment, coupled with the large amount of money I had to pay, pushed me to leave my home country.

I have continued to write and advocate on issues since I’ve left Singapore, on The News Lens International and other regional media.

If you are interested, you can read the closing statement that I wrote in my defamation suit with the Singapore prime minister in the link below.

The closing statement is the final position and arguments that are presented to the judge before he/she makes the judgment.

Singapore prime minister Lee Hsien Loong sued me in 2014 for defamation. Below, I stated my case.

Last month, the unwillingness of Singapore’s government to disclose the full salary of Singapore’s ministers caused much uproar. Singapore’s prime minister is estimated to earn as much as S$2.7 million from 2013 to 2017 but it could be more, because of a Special Variable Payment that the ministers can earn, which has no stated limit. In theory, the ministers can earn an infinite amount of salary.

Two weeks ago, I asked people how much they think the Singapore prime minister should earn. Here are the results.

[If you want to also take part in the survey, you can do so at the end of this article.]

More than 90% (93.84%) of respondents felt that the prime minister’s salary of an estimated S$2.7 million (or more) is too high.

On how much they think the prime minister should earn, more than 40% (42.37%) thought that the prime minister should only earn a salary similar to the average of how much the political leaders in other high-income countries earn (which would be about S$325,000), or similar to the average of the other top 10-ranking countries on the Corruption Perception Index (of about S$250,000).

The News Lens also pointed out that, “In fact, when you look at the other countries which rank similarly on the corruption perception index, their political leaders do not even earn close to the trendline – they earn lesser. It seems that the richer the country is, the less their political leaders need to earn to maintain a low-level of corruption.”

“Only the Singapore ministers have the fantasy that it is otherwise. Only the ministers in Singapore needs to earn so much more than their peers to be able to prevent corruption,” it added.

On whether there should be a limit as to how many times the Singapore prime minister should earn over minimum wage, again more than 90% (92.36%) of respondents agreed that there should be.

And when asked how much they think this limit should be, 65.64% felt that it should only be 5 to 10 times that of minimum wage, like in the Nordic countries or like the average in the other high-income countries, respectively. I met with two Norwegian friends recently, where their prime minister earns only about 5 times the lowest-wage worker. They were shocked to hear that Singapore’s prime minister earns more than 210 times more than how much a cleaner in Singapore earns.

In the previous article, I wrote: “It would take a cleaner more than 210 years to earn what the prime minister earns in a year, or more than 5 working lifetimes. The prime minister takes only less than an hour to earn what a cleaner earns.”

Also, “In the Nordic countries, a worker on a minimum rate wage only needs to take 5 years to earn what their prime ministers earn. However, in Singapore, a cleaner would need to work more than 5 lifetimes to earn what the prime minister earns. This means that low-income Singaporeans would never be able to earn even what the prime minister earns in a year.”

But do you know that Singapore still does not have a minimum wage, and is one of very few countries in the world not to have one? More than 90% of the countries in the world have a minimum wage. (Aside, Singapore is also one of very few countries in the world without unemployment benefits. When I was telling my Norwegian friend about this, he did a double-take and asked me again: “No unemployment benefits?” In most of the other developed countries, this is unheard of, and quite inhumane.)

So, I also asked people if they thought there needs to be a minimum wage in Singapore. Again, more than 90% (90.85%) thought that there should be one.

On how much they thought minimum wage should be in Singapore, more than half (57.46%) felt that Singapore’s minimum wage should be set at S$1,500 to S$2,000. Another close to 30% (29.11%) felt that minimum wage should be higher, at S$2,500 to S$3,000.

In the previous article, I wrote: “In most of the other high-income countries, there is a minimum wage that corresponds roughly to their GDP per capita or cost of living.

“In countries with a similar GDP per capita and cost of living, their minimum (rate) wages are as follows (rounded off to the nearest five hundred, for ease of comparison):

• S$5,000 (in Norway and Switzerland)
• S$4,000 (in Denmark and Sweden)
• S$3,500 (in Finland)
• S$3,000 (in Australia, Luxembourg and New Zealand)
• S$2,500 (in Germany and the Netherlands)
• S$2,000 (in Canada and Japan)”

Note that respondents had also voted that the prime minister should only be paid a limit of 5 to 10 times that of minimum wage. Oxfam pointed out that in Singapore, “there is no minimum wage, except for cleaners and security guards”. And for cleaners, this so-called “minimum wages” is only S$1,060.

Correspondingly, the prime minister should only earn S$65,000 or S$130,000, if his salary should be pegged to current “minimum wage”. This says two things: first, Singapore’s cleaners and low-wage workers are being paid much lower than how much they should earn corresponding to Singapore’s GDP per capita and cost of living. And second, Singapore’s prime minister is overpaid (quite obviously).

Thus, to sum up, Singaporeans believe that Singapore’s prime minister is overpaid. He should be paid a similar salary corresponding to the average salary of the political leaders in other high-income countries. His salary should also be capped at 5 to 10 times the minimum wage, as per that of the Nordic countries and the average of other high-income countries, respectively. Singaporeans also felt that a minimum wage should be set at a level of S$1,500 to S$2,000 (and perhaps to be later increased to S$2,500 to $3,000 – similar to that of other countries with a similar cost of living as Singapore).

Based on this poll, Singaporeans believe that the Singapore prime minister should earn only about S$250,000 to S$325,000. If minimum wage is increased to S$3,000, as Australia, Luxembourg, Switzerland and the Nordic countries already pay, if the prime minister were to earn 5 to 10 times this level, then the prime minister’s salary should be about S$180,000 to S$360,000, which will correspond to the limit that Singaporeans think the prime minister’s salary should be capped at – at 5 to 10 times minimum wage.

In Singapore, there are still currently 43% of residents who earn less than $3,000, and when including for the foreign workforce, as many as 60% of the total workforce in Singapore are earning less than S$3,000, or less than the minimum wage level in Australia, Luxembourg, Switzerland and the Nordic countries.

Clearly, the Singapore prime minister is overpaid. And Singaporeans are being severely underpaid. Ministerial salaries in Singapore need to be brought down by at least 8 times, and Singapore’s minimum salaries should be increased down the road by 3 times.

If you would also like to take the poll, you can take it below.

 

 

 

 

 

(Note: There is a short poll at the end of this article. Please take the poll too on the education system in Singapore.)

Four days ago, Oxfam released its second Commitment to Reducing Inequality Index which ranked Singapore “in the bottom 10 countries in the world in terms of reducing inequality”. Two days later, the World Bank released the Human Capital Index which ranked Singapore tops in terms of “the amount of human capital that a child born today can expect to achieve”.

So, which is right?

Finance Minister Heng Swee Keat said that Oxfam’s index is “a completely wrong analysis”.

He added: “As we know, what really matters to our people is the outcome. It’s the health outcome, it’s the educational outcome and those are fairly objective measures.”

Minister for Social and Family Development Desmond Lee also refuted Oxfam’s report and said: “We think it is more important to look at the outcomes achieved, instead.

He added: “In education, our students consistently outperform others in international rankings. In the Programme for International Student Assessment (PISA), our 15-year-olds rank first for mathematics, science and reading, and our students from the poorest families perform significantly better than their counterparts in OECD countries.”

Commenting on the World Bank’s report at the Human Capital Summit dialogue, prime minister Lee Hsien Loong said: “We want to bring everybody to a good starting point as early as possible in life, regardless of whether you are rich or poor, whether your parents are advantaged or disadvantaged.”

So, who is right?

With all the talk about “outcomes”, let’s look at the outcomes.

It is true that Singapore “outperforms the rest of the world” in education – in science, reading and mathematics, and ranks top in human capital.

But it is also true that the education outcomes are also very unequal.

In Chart 1, you can see that at the easiest level of difficult (Level 1), both the richest and poorest students in Singapore perform well in reading, mathematics and science.

However, as the difficulty level increases (to Level 4), you can see that the achievement gap widens.

Chart 1: World Inequality Database on Education (WIDE)

Next, let’s look at Singapore in comparison with the other high-income countries. I use science at the lower secondary level for illustration because the comparison is more distinct.

At Level 1 (easiest level of difficulty), you can see that Singapore’s students generally perform well, but even then, you can see that when compared with the top 13 performing countries, Singapore has the widest gap in performance between the richest and poorest students (Chart 2).

Chart 2: World Inequality Database on Education (WIDE)

At Level 2 (Chart 3), Singapore’s students still perform well but the gap between the richest and poorest widens and is also the widest among the top 7 performing countries.

Chart 3:  World Inequality Database on Education (WIDE)

At Level 3 (Chart 4), Singapore has become the top performing country, and the gap between the richest and poorest has also widened.

Chart 4:  World Inequality Database on Education (WIDE)

You can see a pattern where at Level 1 (Chart 2) for the group of countries which did not perform as well at the Level 1, their gap between the richest and poorest was already wide (e.g. Saudi Arabia, Kuwait and Qatar, etc.), but at a higher level of difficulty, at Level 2 (Chart 3), the group of countries at the next performing level would start to see their gap widen (e.g. United Arab Emirates, Cyprus and Italy, etc.). At an even higher level of difficulty, at Level 3 (Chart 4), countries like Canada, Sweden and the Netherlands saw their gaps widen.

By Level 4 (Chart 5 below), the gaps in most countries would have narrowed for the majority of the countries – at the level of difficulty where each country has attained its overall optimal potential, this is where the gap is the highest, where their richest students would still be able to outperform their poorest students. But beyond the level of difficulty where the overall student population would have difficulty in performing in, the gap between the richest and poorest would narrow.

At Level 4 thus, for most countries, the gap between the richest and poorest therefore narrowed because even among the richest students, they would have difficulty performing well at the highest level of difficulty. However, Singapore bucks the trend where the richest students are still performing fairly well.

But this is where the inequality becomes glaringly obvious. In fact, the poorest students perform behind the richest students in the top 20 countries. What this shows is that yes, Singapore’s overall education outcomes is good, but it is also true that the education outcomes are very unequal, where the gap between the richest and poorest is also very high.

Chart 5:  World Inequality Database on Education (WIDE)

The same story plays out in science at the primary level (Chart 6) and science at the upper secondary level (Chart 7), at the highest level of difficulty (Level 4) – at the upper secondary level, the poorest students in Singapore perform behind the top 35 countries, and even behind the middle-income students in the top 25 countries.

Chart 6: World Inequality Database on Education (WIDE)

Chart 7: World Inequality Database on Education (WIDE)

It is also interesting to note that because Singapore’s education system is unequal, that even at the lowest level of difficulty for science at the primary and upper secondary level, Singapore does not rank at the top, but at the 10th and 9th, respectively.

In mathematics at the primary (Chart 8) and lower secondary (Chart 9) levels, you see the same situation at the highest level of difficulty (Level 4) – the gap between the richest and poorest is also the widest in Singapore.

Chart 8: World Inequality Database on Education (WIDE)

Chart 9: World Inequality Database on Education (WIDE)

What these charts show are that the richest students in Singapore outperform students in the rest of the world, and are still able to perform fairly well at the highest levels of difficulty (Level 4). However, Singapore’s students do not perform equally well, and the gap between the richest and poorest widens as the difficulty level increases.

In other words, by looking at “outcomes”, as Heng Swee Keat and Desmond Lee purported, not every school is a good school.

Interestingly, when you look at Chart 10 – in the area of mathematics at the upper secondary level, again at the highest level of difficulty (Level 4), Singapore is still at the top but the other countries are quickly catching up, in spite of being much further behind at the primary (Chart 8) and lower secondary level (Chart 9), which suggests that too many examinations and streaming at too early the years of education might not be necessary, since students do catch up to perform similarly well in their later years – as Chart 10 below evidently shows, from the example in other countries.

The question therefore, is there a need to put our students through the stress of examinations and streaming at their earlier years?

Chart 10: World Inequality Database on Education (WIDE)

Finally, in terms of reading, Singapore also performs the best at the primary level (Chart 11) at the highest level of difficulty (Level 4), but the gap between the richest and poorest is also the widest, with the poorest students performing behind the richest students in the top 25 countries.

Chart 11: World Inequality Database on Education (WIDE)

For reading at the upper secondary level (Chart 12) at the highest level of difficulty (Level 4), Singapore’s students also come up tops but the gap between the richest and poorest is also the widest. In fact, the poorest students also perform behind the richest students in almost all the countries ranked.

Chart 12: World Inequality Database on Education (WIDE)

In fact, at the lowest level of difficulty for reading at the primary and upper secondary level, again because of Singapore’s inequality, Singapore does not rank at the top, but at the 17th and 9th, respectively.

Also, Chart 12 shows again that by the upper secondary school level, the other countries are catching up, and not only that, they are able to do so without as wide a gap as Singapore.

This suggests that there is really no need for us to push our students to be streamed at such an early age when they would evidently be able to catch up in their later years – at least by the upper secondary level.

Also, what is clearly a concern in these comparisons is that even though Singapore provides a good basic foundation-level education, education outcomes at higher levels of difficulty is vastly unequal.

Looking at these charts, what Lee Hsien Loong said then made some sense, when he said: “We want to bring everybody to a good starting point as early as possible in life, regardless of whether you are rich or poor, whether your parents are advantaged or disadvantaged.”

But this raises some questions:

1. After “bringing everybody to a good starting point”, does the government intent to help everyone move up together, or will the richest students have more access to better education, as is the case? In other words, is every school truly a good school?
2. Second, the government might say that they are “bringing everybody to a good starting point as early as possible in life“, but if other countries have shown that by the upper secondary level, students will catch up anyway, is there a need to put that much stress on students at such an early age? Is there a need to stream them at age 10 (Primary 4), age 12 (Primary 6) and age 14 (Secondary 2) when an examination at age 16 should suffice?
3. Finally, if students are only brought to a good starting point but they are not helped to perform well all the way (where the gap between the richest and poorest is the highest in Singapore for the highest level of difficulty), then does it help to narrow the gap between the “rich and poor”, and between the “advantaged and disadvantaged”, or is the education system therefore actually perpetuating inequality?

According to the OECD which conducted PISA, “Upper secondary students from disadvantaged backgrounds are less likely to perform well in PISA assessments.” The “outcomes” of Singapore’s inequality – which is the highest among the advanced economies – is therefore a threat to Singapore’s education system.

We really have to question if we want a more equal and less stressful education system for our children.

Below are five short polls on Singapore’s education system. After reading this article, how would you answer the questions below?

 

 

 

 

 

I have also previously written about the inequality in Singapore’s education system. You can read it here.

Between 2013 and 2017, Singapore’s prime minister earned as much as S$2.7 million a year, and possibly more.

However, Singapore’s cleaners still earn as little as S$1,060 a month, or less. There is a massive gap between how much the prime minister and Singapore’s workers earn.

QUESTION: Therefore, how much do you think Singapore’s prime minister and Singapore’s workers should earn?

In this short post, you can take 6 polls to find out what other Singaporeans think is a fair wage for the prime minister and Singapore’s workers.

Before each question, there will be brief statistics to provide some background information for you.

Let’s begin.

Questions 1/2: How Much Salary Do You Think Singapore’s Prime Minister Should Earn?

To give you a gauge, below is how much the other high-income countries pay their political leaders (rounded off to the nearest fives):

• Singapore’s prime minister earns more than 200 times what cleaners in Singapore earn.
• In comparison, in the other high-income countries, their political leaders only earn an average of about 10 times the minimum wage. In the Nordic countries, it is even fairer – their political leaders earn only an average of about 5 times the minimum rate wage.
• When comparing with median wage, political leaders in other high-income countries also only earn an average of about 5 times the median wage. In Singapore, the prime earns nearly 60 times more, than Singapore’s median wage of S$3,749 a month (not including CPF).
• Political leaders in other high-income countries also only earn an average of about 6 times their countries’ GDP per capita. In Singapore, the prime minister earns more than 35 times more, than Singapore’s GDP per capita of S$73,167 a year in 2016.
• When pegging the salaries of the political leaders to the average cost of living in these countries, they generally follow a trendline. But Singapore is way off the mark – Singapore’s prime minister and ministers earn several times more than what corresponds to Singapore’s average cost of living, when compared to the other high-income countries.
• In the top 10 ranking countries on the Corruption Perception Index or the other countries perceived to be the least corrupt in the world, their political leaders earn an average of about S$250,000. Singapore ranks 6th but its prime minister earns more than 10 times the salaries of the other political leaders.
• In fact, the political leaders in other high-income countries earn an average of S$325,000 but Singapore’s prime minister earns as much as S$2.7 million, or more. This is more than 8 times more than them.

Source: The Crazy Rich Salaries of Singapore’s Ministers Versus the Poor Peasants Who Support Them

With these facts as reference, how would you answer the following question?

 

For the question below, note that when the minimum and median wages changes, the prime ministers’ salary would change accordingly.

 

Questions 3/4: Should There Be A Limit As To How Many Times Singapore’s Prime Minister Earn More Than Minimum Wage?

As calculated, Singapore’s prime minister earns as much as S$2.7 million a year between 2013 and 2017, or even more. However, Singapore’s cleaners earn as little as only S$1,060 a month. The prime minister earns more than 210 times more than what a cleaner earns, and it would take more than 5 working lifetimes for the cleaner to earn the same amount.

Also, last year, there were still 7% of Singapore residents who earned less than S$1,000, and when you include the foreign workforce, 20% of workers were earning less than S$1,000 in Singapore.

Singapore’s prime minister also earns 100 times more than the starting salary of a polytechnic graduate of S$2,200 a month last year, and nearly 60 times more than Singapore’s median wage of S$3,749 a month last year.

In the other high-income countries, their political leaders earn only about 10 times more than minimum wage. And in the Nordic countries, their political leaders earn only about 5 times more than the minimum rate wage.

In the Nordic countries, a worker on a minimum rate wage only needs to take 5 years to earn what their prime ministers earn. However, in Singapore, a cleaner would need to work more than 5 lifetimes to earn what the prime minister earns. This means that low-income Singaporeans would never be able to earn even what the prime minister earns in a year.

As such, how would you answer the following questions?

 

 

Questions 5/6: How Much Do You Think Singapore’s Minimum Wage Should Be?

But do you know that Singapore still does not currently have a minimum wage, and is one of very few countries in the world to still not have one?

Cleaners earn a starting wage of only S$1,060 but there are still 7% of Singapore residents who earn less than S$1,000 (20% when including the foreign workforce).

In most of the other high-income countries, there is a minimum wage that corresponds  roughly to their GDP per capita or cost of living.

In countries with a similar GDP per capita and cost of living, their minimum (rate) wages are as follows (rounded off to the nearest five hundred, for ease of comparison):

• S$5,000 (in Norway and Switzerland)
• S$4,000 (in Denmark and Sweden)
• S$3,500 (in Finland)
• S$3,000 (in Australia, Luxembourg and New Zealand)
• S$2,500 (in Germany and the Netherlands)
• S$2,000 (in Canada and Japan)

Mind you, Singapore’s GDP per capita and cost of living is among the top 10 highest in the world, but it does not even have a minimum wage and 20% of the total workforce still earn less than S$1,000.

In other words, 20% of Singapore’s workers earn only half the minimum wage of Canada and Japan, or less, and only one-third that of Australia, Luxembourg and New Zealand, or less. In fact, half of Singaporeans earn less than the minimum rate wage in the Nordic countries and Switzerland, and nearly 70% of Singaporeans earn less than the minimum rate wage in Norway and Switzerland.

Given the above information, how would you answer the question below?

 

 

Have you finished taking the polls?

But here’s more information for you.

In the other high-income countries, their political leaders earn about 6 times more than their GDP per capita. Their political leaders also earn about 5 times more than median wage and 10 times more than minimum wage. This means that there isn’t that big a disparity between minimum wage, median wage and the salaries of the political leaders.

But in Singapore, the prime minister earns more than 35 times more than the GDP per capita, nearly 60 times more than median wage, 100 times more than the starting salaries of polytechnic graduates and more than 210 times more than cleaners. This not only shows that there is a massive disparity between the wages of ordinary citizens like you and I, and with the prime minister and ministers, but also that when compared with the GDP per capita, Singaporeans are not adequately compensated.

Whereas citizens in the other high-income countries are properly compensated in wages from what they have helped to contribute in GDP, Singaporeans are not returned the GDP that they have helped to contribute.

This is why even though Singapore’s cost of living has grown with the GDP per capita, the majority of Singaporeans cannot catch up with the cost of living, because their wage growth has fallen way behind the growth in GDP.

Meanwhile, the Singapore prime minister and ministers pay themselves way more than is necessary for the cost of living in Singapore. So while PAP’s ministers can enjoy the comforts of life, the rest of Singaporeans have to slog, some until their deaths.

Have you ever questioned why you are working so hard for the people who are making your lives so difficult? Why don’t you put in people in government who will actually work for you?

Singapore has actually earned enough to ensure that all Singaporeans will be able to enjoy a comfortable life, but instead the PAP government has allowed themselves to live a good life, while the rest of you struggle.

Why do you make it so hard for yourself?

This is the third part of a series of articles that I have written on healthcare financing over the past one month, which compares how much Singaporeans are paying into healthcare with other countries and how much they are getting back.

In the first article, I wrote about how the Singapore government puts a cap on how much Singaporeans get to claim from what they pay into national health insurance (Medisave and MediShield) but in the Asian Tigers and Japan, their governments do not put a cap. Instead, they do the opposite – they put a cap on what their citizens have to pay out-of-pocket, and protect their citizens.

This leads on the second article which showed that of the national health insurance premiums that the citizens of the Asian Tigers, Japan and Germany pay, they get back fully the national health insurance premiums that they pay in a year. However, Singaporeans only get back 8.5% of the amount that they pay into national health insurance (Medisave) premiums.

In the third part – which is this article, I show how citizens of the Asian Tigers (Taiwan and South Korea), Japan and Germany pay between 5% and 15% of their wages into national health insurance which then pays for about 50% of the total health expenditure.

But guess how much national health insurance pays into total health expenditure in Singapore?

Well, read on.

In Taiwan, citizens pay 4.69% of their wages into national health insurance.

Source: National Health Insurance Administration, Ministry of Health and Welfare – How Premiums Are Calculated

And in Taiwan, the national health insurance that citizens pay, pays for 52.6% of total health expenditure.

Source: National Health Insurance Administration, Ministry of Health and Welfare

In South Korea, citizens pay 6.12% of their wages into national health insurance.

Source: National Health Insurance Service Program – Contributions

And in South Korea, the national health insurance that citizens pay, pays for 42.8% of total health expenditure.

Source: KOrean Statistical Information Service – National Health Care Expenditure by Suppliers and Financial Resources (National Medical Expenses)

In Japan, citizens pay a base 10% of their wages into national health insurance.

Source: Japan Health Insurance Association – Insurance rates 

And in Japan, the national health insurance that citizens pay, pays for 48.6% of total health expenditure.

Source: Ministry of Health, Labor and Welfare – Overview of Medical Service Regime in Japan Financial Situation of Health Insurance

In Germany, citizens pay 14.6% of their wages into national health insurance.

Source: GKV-Spitzenverband – Statutory health insurance

And in Germany, the national health insurance that citizens pay, pays for 58.5% of total health expenditure.

Source: Statistisches Bundesamt – Health expenditure

So, you can see that in these other countries, citizens pay between 5% and 15% of their wages into national health insurance and the national health insurance pays for about half of total health expenditure.

How about Singapore?

It is ugly.

In Singapore, citizens pay between 8% and 10.5% of their wages into national health insurance (Medisave) – which is one of the highest among the countries compared and actually, in the world.

Source: Ministry of Health, Singapore – Medisave Contributions

But in Singapore, the Medisave that Singaporeans pay, pays for ONLY 5.5% of total health expenditure – which would be among the lowest proportionate returns for national health insurance in the world, or possibly the lowest.

Source: Ministry of Health, Singapore – Healthcare financing sources

Isn’t this shocking?

In other countries, the national health insurance that citizens pay, pays for about 50% of total health expenditure.

But in Singapore, it is ONLY 5.5% – or ONLY about one-tenth that of the other countries.

Maybe it is clearer when we put it all in a chart.

Below, you can see that as citizens in a country pay more of their wages into national health insurance, the national health insurance would pay for a higher proportion of total health expenditure.

Taiwan is an exception where healthcare costs are managed so efficiently that national health insurance gives even higher proportionate returns on total health expenditure than the other countries.

However, Singapore bucks the trend on the other extreme – Singaporeans pay one of the highest proportion of their wages into national health insurance (Medisave) in the world but actually get back possibly the lowest proportionate returns, out of total health expenditure.

In fact, based on the benchmark of other countries, Singaporeans should by right actually be getting back 50% that their Medisave should pay for total health expenditure!

And as I had written in part two, where the citizens of these other countries get back fully what they pay into national health insurance premiums every year, and if Singaporeans also get back fully what they pay into Mediave premiums, then based on this benchmark, Singaporeans should be getting back 65% that their Medisave should pay for total health expenditure!

(Explanation: (1) Out of the Medisave premiums that Singaporeans pay, they only get to claim back 8.5% of what they pay in a year. If Singaporeans are able to claim back in full what they pay into Medisave premiums in a year, they would be able to claim back about another 11.8 times more. (2) Therefore, if Medisave only pays for 5.5% of total health expenditure now, then when this is multiplied by 11.8 times, Medisave should actually pay for 65% of total health expenditure.)

But instead, what is happening?

Instead of how Medisave should rightfully be paying for 65% of total health expenditure, it is Singaporeans who have to fork out another 61% out of their own pockets to pay for the total health expenditure instead! (after deducting for government expenditure (and Medifund which is part of government expenditure), Medisave withdrawals and MediShield claims)

Source: Ministry of Health, Singapore – Healthcare financing sources

So where the other countries would take the national health insurance premiums paid by their citizens and return fully to fund about 50% of total health expenditure, the Singapore government instead keeps more than 90% of what they collect from Medisave and make Singaporeans pay another 61% of total health expenditure!

Can you see now how Singaporeans are actually DOUBLE-PAYING for healthcare?

The Medisave that we pay should pay for 65% of total health expenditure, but we only get back 5.5%. What about the balance of 59.5%? (65% – 5.5% = 59.5%)

Instead, the government makes Singaporeans pay in cash out-of-pocket for the balance of 59.5% from Medisave that they should return – we have to pay out-of-pocket another 61%!

Can you see now how Singaporeans are DOUBLE-PAYING?

I have been saying this many times before. But can you see now how it actually works out?

Does this look clearer now? Singaporeans are paying double an amount what they should rightfully be able to get back from Medisave claims.

Now, if you thought that Medisave is bad.

Look at how much MediShield pays.

And do you know, by right, how much should Singaporeans actually need to pay out-of-pocket?

1. The government expenditure on health is only 31%.
2. MediShield pays for 2.14%. But remember, over the last few years, Singaporeans only get back about 50% of what their pay into MediShield premiums. So, if Singaporeans also get back fully what they pay into MediShield premiums, then MediShield should cover about 4.3% of total health expenditure.
3. And if you add on that Medisave should pay for 65% of total health expenditure, how much should Singaporeans pay out-of-pocket?

ZERO PERCENT!

Singaporeans should be paying S$0 – ZERO – out-of-pocket!

Source: Ministry of Health, Singapore – Healthcare financing sources

However, this is what is happening today:

1. Government health expenditure takes up 31.1% of total health expenditure.
2. Medisave covers only 5.5 of total health expenditure.
3. MediShield covers only 2.1% of total health expenditure.
4. Singaporeans have to pay 61.3% out-of-pocket.

But this is what should be happening:

1. Government health expenditure takes up 31% of total health expenditure.
2. Medisave should cover 65% of total health expenditure.
3. MediShield should cover 4.3% of total health expenditure.
4. All these should cover 100.3% of total health expenditure.

In short, Singaporeans are paying enough in taxes and national health insurance to get FREE HEALTHCARE today!

We should not even be paying anything out-of-pocket!

In fact, we should get back 0.3% in return. In Germany, this would be returned to citizens as bonuses.

Additionally, seeing now how the Singapore government profits from Medisave and MediShield, then how much does the government profits from the revenue we pay to them? (It is already known that the government has S$20 to $S40 billion in cash surplus every year that it does not declare to Singaporeans as budget surplus, which therefore is not spent back for Singaporeans.)

And so, what is the net effect with how the Singapore government is profitting from what Singaporeans pay?

Singaporeans pay one of the highest proportion of our wages into national health insurance (Medisave) in the world, and by right the Medisave that we pay should pay for 65% of total health expenditure.

But instead, the government turns it around and makes Singaporeans pay the highest out-of-pocket expenditure among the developed countries – 61%.

In comparison, citizens from Taiwan, South Korea, Japan and Germany only need to pay between 10% and 35% out-of-pocket.

And thus Singaporeans actually pay the most dollar amount for out-of-pocket expenditure (after accounting for purchasing power parity) in the world!

Sources: National Health Insurance Administration, Ministry of Health and Welfare (Taiwan), KOrean Statistical Information Service – National Health Care Expenditure by Suppliers and Financial Resources (National Medical Expenses) (South Korea), Ministry of Health, Labor and Welfare – Overview of Medical Service Regime in Japan Financial Situation of Health Insurance (Japan), Statistisches Bundesamt – Health expenditure (Germany), Ministry of Health, Singapore – Healthcare financing sources (Singapore)

So, all in, this means that whatever Singaporeans pay in taxes, Medisave and MediShield should pay fully for the total health expenditure in Singapore.

Singaporeans should not have to pay a single cent for healthcare!

So why is the People’s Action Party (PAP) ruling government making Singaporeans double-pay on healthcare and profitting from the monies that Singaporeans pay into national health insurance?

Do you think this is ethical?

Do you think that whenever the PAP threatens that Singaporeans have to pay higher taxes in order to get higher subsidies for healthcare, this is fair?

Source: The Straits Times – Free healthcare will mean raising taxes: Tharman

Then what should be done?

The Worker’s Party ‘s Ms Sylvia Lim had already flagged this issue out in parliament in 2012, and asked why the Singapore government’s expenditure is not following international standards.

She said:

Mr Inderjit Singh before me shared how Singapore’s total expenditure on healthcare as a % of GDP was far lower than international standards. More importantly, the government or public expenditure on healthcare is also far lower than elsewhere.

In addition, the Singapore government’s contribution to total health care expenditure has fallen from 51% in 1995 to 41% in 2009. This is much lower than over 60% in many other middle and high income countries.

The Worker’s Party’s Gerald Giam also said in parliament in 2013:

In Singapore, less than one-third of all healthcare costs are paid by the Government. More than 60% of costs are paid by patients out-of-pocket, which includes cash and Medisave. This is much higher than the average of 14% in high income countries, according to data from the World Health Organization.

Both Ms Lim and Mr Giam asked why the Singapore government is underpaying and why Singaporeans are overpaying for health.

In fact, the Singapore Democratic Party (SDP) has even proposed a solution.

Since Singaporeans are already overpaying into Medisave and MediShield today, the Singapore Democratic Party (SDP) wants to reduce the payments that Singaporeans pay into national health insurance.

And it also proposes that Singaporeans should only have to pay out-of-pocket 17% of total health expenditure.

Source: The SDP National Healthcare Plan – Caring for All Singaporeans

The Singapore Democratic Party (SDP) also proposes that Singaporeans should pay only 10% for medical services that they are charged for.

And that there should be a cap of S$2,000 that Singaporeans need to pay on healthcare in a year – Singaporeans should not pay more out-of-pocket beyond that.

Source: The SDP National Healthcare Plan – Caring for All Singaporeans

So you see, the Worker’s Party has pointed out the issues with the PAP government’s discrepancy in the health expenditure financing in Singapore.

And the Singapore Democratic Party (SDP) has also spelt out clearly what the solutions are.

But my dear Singaporeans, why did you choose to hurt yourself?

 

The CPF Advisory Panel’s Part Two of their recommendations to “enhance” the CPF system was released yesterday.

For readers who are not in the know, the CPF is the Central Provident Fund which is the public pension system in Singapore. Below is a quick chronology of events before we proceed to discuss the recommendations (if you are aware of the background, please skip on):

• In May 2014, I was sued by the Singapore prime minister in relation to an article that I had written on the CPF, the lack of transparency in its management and the inadequate pension funds that Singaporeans were receiving – an OECD (Organisation for Economic Co-operation and Development) report at that time ranked Singapore’s pension funds as being the least adequate among Asian and European pension funds compared. I have since been ordered to pay the prime minister S$180,000 which I have to pay until 2033.
• Prior to that, I wrote several articles that revealed that the CPF funds are being channelled into the Singapore reserves and then into the GIC and Temasek Holdings – the two government investment firms, where these investment firms were earning high returns of between 6.5% to 16% (at that time) but the CPF pension funds were only earning 2.5% to 4% – said to be the lowest returns on pension funds in the world.
• Before I was sued, the Singapore government did not publicly inform Singaporeans of the channelling of the CPF funds into GIC and Temasek Holdings. I had to trace on different government websites to locate the information to put them together.
• It was only at the end of May 2014, after I was sued did the government finally admit that the CPF funds are indeed being funnelled into GIC.
• For the next 4 months, from June to September 2014, I organised and/or took part in monthly protests to demand for transparency on the government’s management on the CPF. The first two protests were attended by 6,000 and 5,000 people, respectively – one of the biggest protest attendances since Singapore’s independence. After the 4th protest, the police interrogated about 20 of us and charged 6 of us – to stop the protests. I was fined S$1,900.
• In August 2014, during his National Day Rally speech, the prime minister said that he would appoint a CPF Advisory Panel to study making enhancements to the CPF system.
• The CPF Advisory Panel was appointed in September 2014 – the same month that the last protest was held and then squashed.
• The panel released the first part of its report in February last year, before the general election in September. The second report was released yesterday.

In this article, I outline the summary of the second part of the report, and give my views on it.

There are two main components to the recommendations. In the first – the panel introduced a ‘new’ CPF payout plan:

• Under the current CPF Standard Plan payout, a person receives a constant payout until he or she passes on.
• The panel came out with a ‘new’ CPF plan which it said will offer increasing payouts. On first thought, you might think it looks good – until you look at the details.
• The panel gave the following illustration: If under the Standard Plan, an individual receives a constant payout of S$720 every month from 65 years old.
• But if an individual wants to get increasing payouts (under the ‘new’ plan), the individual will instead have to accept getting a lower S$560 a month in the first year (or about 20% lower), which will then see a 2% increase every year after that. So, you will only get increasing payouts if you are willing to accept lower payouts at the start.  

But that’s not all.

Strangely I cannot find the following information in the panel’s report, but look at what the Channel NewsAsia reported:

Starting from a full calendar year at age 65, the cumulative payout for both individuals roughly evens out at age 90, which means to say, both would get a cumulative payout of about S$218,000 in the fourth month of their ninetieth year.

What this means is that if you go onto the ‘new’ plan, you will only get back the same cumulative amount as the Standard plan when you reach the age of 90.

More importantly, what does this mean?

First, look at the life expectancy of Singaporeans in the chart below. Men have a life expectancy of 80 years old, for women it is 85 years old.

This is really how you should look at the panel’s recommendations and what it really means:

• Under the current CPF Standard Plan, you get to take out higher payouts at the start. But under the ‘new’ plan, you only get lower payouts at the start.
• Since the ‘new’ plan would only let you take out the same cumulative amount as the Standard plan when you reach 90, this means that before age 90, you will always be getting lesser in total under the ‘new’ plan than the Standard plan.
• However, as the life expectancy of men is 80 years old and for women is 85 years old, if someone opts for the ‘new’ plan, he or she will get back lesser cumulative payouts in total, as compared with the Standard (older) plan before he or she is likely to pass on.

So is the ‘new’ plan that the panel just recommended good? Some people would think that it is actually worse – this plan becomes yet another way for the government to lock up your CPF for their other uses (other than for your pension).

But look at how the panel used several strategies to spin the recommendations to try to make them sound good.

You saw above how the panel tried to sell that you could get ‘increasing’ payouts – but only to find out that you would have to accept lower starting payouts.

The panel also said that, “payouts under the two LIFE plans offered today are not designed to increase over time, and hence the purchasing power of the payouts will decrease as members get older.” Their proposed ‘new’ plan is supposed to mitigate that.

But the reality is that the purchasing power under the current Standard plan is already low, so by making the starting payout lower, it means purchasing power will become even lower and remain low over the years, then what’s the point? – we will get to this a bit later.

The panel also said: “The rate of increase of payouts should be set at 2% for the escalating CPF LIFE plan”, which means that under the ‘new’ plan, payouts would increase by 2% every year.

But this is just marketing speak – to give you the impression that payouts are increasing, but in reality, you are still getting back the same amount of money in total at age 90. In fact, you get back lesser in total before age 90. So does 2% increments matter? It does not.

Also, why just 2%? Knowing that the life expectancy for men is 80 years old and that for women, it is 85 years old, why did the panel not propose to increase payouts by 2.5% or 3% to allow individuals to attain the same cumulative payouts by age 80 or 85 years? Why cause individuals to get back lesser money before they pass on?

I will briefly touch on the second component of the recommendations before moving on:

• The panel also introduced the ‘Lifetime Retirement Investment Scheme’ to allow CPF members to invest in external funds to earn higher returns (other than the Singapore Government Securities (SGS) that the CPF are currently invested in – which are then funnelled to the reserves and then to GIC and Temasek Holdings).
• The difference from the current CPF Investment Scheme (CPFIS) which also allows CPF members to invest their CPF externally is that first, the panel claimed that administrative fees under the new scheme are expected to be lower. Under the CPFIS, the panel said that fees are “3% for sales charges and … up to 1.75% (for annual fees) per year”. Under their proposed scheme, fees “could be 0.5% per year or lower”.
• However, to keep costs low, instead of having someone to actively manage your CPF funds, the panel recommends that the funds are passively managed instead.

What are the concerns?

• My initial thinking was that the new scheme could be a good thing because there have been requests for the CPF to be managed and invested on its own. However, what does it mean for the funds to be managed “passively”. Even under Hong Kong’s Mandatory Provident Fund (MPF) pension funds, I understand that there are fund managers and even then, they are able to keep fees as low as 0.6% of fees.
• There are also not enough details at this moment to make an informed critique. My worry, however, is that the CPF funds have been traditionally used by the government as a cheap source of funds for their use via the GIC and Temasek Holdings. The government is unlikely to be willing to let go of the CPF, and therefore even under the proposed ‘Lifetime Retirement Investment Scheme’, would the funds still be somehow channelled to the GIC and Temasek Holdings? Would there be hidden fees for the administrative fees? But these are hypothetical questions which we can only consider better with more details – though knowing the government, I would scrutinise carefully what would be proposed.

More importantly, the panel proposes that CPF members should still have at least $20,000 in their CPF Ordinary Account and $40,000 in their Special Account – just as under the CPFIS – before they would be able to use the excess funds to invest under the ‘Lifetime Retirement Investment Scheme’.

But what is the issue with this?

• The panel itself revealed that 40% of active CPF members aged 45 do not even have $40,000 inside their Special Accounts. Even though CPF members contribute a higher proportion of their CPF into the Ordinary Account than the Special Account, but Tan Chuan-Jin revealed in 2014 when he was Manpower Minister that, “an average of 55% of (the Ordinary Account) savings had been withdrawn (by  CPF members) to finance their flats at age 55“. As flat prices have increased and CPF members use increasingly more funds from their CPF to pay for their flats, logically the proportion of Ordinary Account savings used to finance flats would be higher as generations are younger. Thus how many Singaporeans would have enough combined funds inside their CPF to invest?
• As such, the ‘Lifetime Retirement Investment Scheme’ is likely to benefit only the higher-income earners and where the lower-income earners would not be able to earn higher returns on their CPF – if the proclaimed effect of the proposed investment scheme takes place. Low-income earners would still have no choice but to accept low returns while their funds are being diverted to GIC and Temasek Holdings, and the rich would have more flexibility to withdraw from the loop to invest elsewhere, which would then further widen the rich-poor gap and inequality in retirement.
• The solution to this is to ensure that wages rise at the bottom to allow wages (and savings) to catch up by defining a poverty line and implementing a minimum wage to that level – however, the government has refused to do so for both these definitions.

I would now like to revisit the panel’s Part One of their recommendations.

Prior to the recommendations, there have been grouses with the CPF Minimum Sum for many years. To ‘resolve’ the issue the government then changed the naming of the ‘CPF Minimum Sum’ and renamed it to be called the ‘Full Retirement Sum’.

However, the inherent problems with the ‘CPF Minimum Sum’ are still not changed. The main bugbear that a segment of Singaporeans have with the ‘CPF Minimum Sum’ is that it required them to set aside a minimum amount of funds inside their CPF, which they otherwise were not able to withdraw at 55 years old.

• But the basic issue is that Singaporeans have not been able to earn enough savings inside their CPF and are therefore not able to save enough to meet the ‘CPF Minimum Sum’. However, there was no effort by the government to allow the general population to earn higher savings (i.e. by increasing CPF returns across the board).
• Instead, all the government did was to rename the ‘CPF Minimum Sum’ to the ‘Full Retirement Sum’ but kept the same functional components. As such, as of 2015, Singaporeans were still required to have at least S$151,000 inside their CPF to meet the ‘Full Retirement Sum’ – as would be required under the ‘CPF Minimum Sum’.

So, why does this matter at this point?

• According to the government, if you have enough funds inside your CPF to meet the ‘Full Retirement Sum’, you would receive a CPF payout of S$1,200 to S$1,300 from retirement at age 65.
• However, if you only have half that amount, or the ‘Basic Retirement Sum’ of S$80,500, you would only get a payout of S$650 to S$700.

The problem?

• The panel just revealed that 40% of active CPF members aged 45 do not even have $40,000 inside their Special Accounts. And since a significant proportion of their Ordinary Account have been used to finance their flats, how much would the majority actually have, after combining the leftover funds inside their Ordinary Account with the Special Account? Perhaps another S$20,000 or S$40,000 – or a total of S$60,000 or S$80,000 at age 45?
• Also, noting that people at aged 65 today would have earned lower wages over their lifetimes and could therefore only save lesser, how much would they have inside their CPF? Would it only be about S$60,000 or S$80,000? I estimated that the median balance would be only S$55,000.
• Previously, socio-economic blogger Leong Sze Hian had estimated that 85% of Singaporeans aged 55 and above would not have been able to meet the (now renamed) ‘Full Retirement Sum’ which has now been increased to S$166,000. I estimated this to be about 90%.

It looks like our estimates could not have been far off.

And what is the issue with this?

• If the majority of elderly Singaporeans do not even have S$80,500 inside their CPF, then they would not even be able to get a monthly payout of S$650 under the ‘Basic Retirement Sum’.
• The last time the government revealed how much the median CPF Life payout was, was in 2011 when Deputy Prime Minister Tharman Shanmugaratnam said in a parliamentary reply that the median payout was only S$260 and the highest payout was only S$1,280.
• How much would the median payout have increased to today? – S$400? S$500? I estimated that the median payout in 2014 would only be S$400. I do not think I am that far off.

So, the problem?

• The government might come out with all the fanciful names – ‘Full Retirement Sum’, ‘Basic Retirement Sum’, etc and what their respective payouts could be, but the issue?
• Most elderly Singaporeans would not even get the S$650 payout under the ‘Basic Retirement Sum’ because they simply would not have enough retirement savings to do so.
• Then what is the point of having all these names, except to let the government look like it is ‘trying’ to salvage the situation? Until now, the government still has not revealed what the median CPF balance of Singaporeans is, and what the median CPF payouts are, despite numerous requests.

Perhaps, now we know why they do not.

Simply put, the whole CPF scheme that the government is trying to sell is hollow. They are trying to sell a scheme to Singaporeans which they know there is nothing to sell.

Just take a look around you. If elderly Singaporeans are able to get back enough payouts (what would be adequate for you to live on in a month? – S$1,500?), then why are there still so many elderly Singaporeans working as cleaners, security guards or collecting cardboards?

So, how does all these tie in with the panel’s Part Two of the panel’s recommendations – which we started this article off with?

• The panel decided to come out with a ‘new’ CPF Life Plan, where they said that Singaporeans will have to get a lower CPF starting payout. Thus if the median payout under the Standard plan is only, let’s say, S$400 today, then under the ‘new’ plan, payouts would only start at S$320 (the panel said that starting payouts will be about 20% lower).
• The panel also said that they came out with the ‘new’ plan to assuage the “concerns of (CPF) members over the reduction in purchasing power of payouts” and to “protect (CPF members) against increases in the cost of living in their retirement years”.
• But remember the point I made above that if the purchasing power of the CPF payout under the current Standard plan is already low, then under the ‘new’ plan, it would be worse?
• This is what I meant – S$400 is already very poor purchasing poor; S$320 is even worse. Even with a 2% increase in the payout every year, it will still be very poor.

Thus is there any difference that the panel came out with a ‘new’ plan? No – the payouts will still mean very poor purchasing powers, and in fact, under the ‘new’ plan, it is even worse because Singaporeans would be getting even lesser starting payouts and would not get back as much payouts in total as the old Standard plan until they are 90 years old – but which most people would not live until then.

So, from what we know about the CPF recommendations made by the CPF Advisory Panel so far, did they actually enhance the CPF system for the general population?

Not really.

The only glimmer of hope perhaps, is the ‘Lifetime Retirement Investment Scheme’ but I won’t be holding my breath, for the reasons mentioned above.

I am afraid this was mostly a public relations exercise all this while to placate Singaporeans while allowing the government to continue to earn from Singaporeans’ CPF.

Last week, I wrote about how there is a limit as to how much citizens in the Asian Tigers and Japan need to pay for healthcare but in Singapore, there is instead a limit as to how much Singaporeans can claim. In fact, there is no cap as to how much Singaporeans have to pay – thus in 2012, more than 2,400 Singaporeans paid more than S$10,000 for their hospital bills.

This week, I decided to look further – at how much citizens in the Asian Tigers (Taiwan and South Korea), Japan and Germany pay into health insurance and how much they get back, in comparison with Singapore.

In Taiwan, citizens paid NT$546 billion into National Health Insurance in 2014. They got back NT$519 billion.

Source: National Health Insurance Administration, Ministry of Health and Welfare – The National Health Insurance Statistics, 2014

In Taiwan, citizens got back 95.1% of what they paid.

In South Korea, citizens paid 41.6 billion won into National Health Insurance in 2014. They got back 42.8 billion won.

Source: KOrean Statistical Information Service – Statistical Database Financial Indicators of N.H.I.S by Year

In South Korea, citizens got back 102.9% of what they paid.

(Government subsidies and surcharge on tobacco account for 12.5% of the income of the National Health Insurance which pay for the administrative expenses.)

In Japan, citizens paid 128,019 (100 million) yen into National Health Insurance in 2010. They got back 127,726 (100 million) yen.

Source: Ministry of Health, Labor and Welfare – Overview of Medical Service Regime in Japan Financial Situation of Health Insurance

In Japan, citizens got back 99.8% of what they paid.

In Germany, citizens paid 199.6 billion Euro into the national Statutory Health Insurance in 2014. They got back 200.4 billion Euro.

Source: GKV-Spitzenverband – Statutory health insurance Annual Report 2014

In Germany, citizens got back 100.4% of what they paid.

(Note that “0.8 billion Euro was financed from reserves”. The report also said that, “The better off health insurance funds were able to pay bonuses from their reserves to their members amounting to roughly 0.7 billion Euro.”)

But what about Singapore?

Singaporeans only get back very little bit of what they pay.

Let’s take a look at Medisave national health insurance. In 2013, the Medisave balance is S$64.9 billion. In 2014, the Medisave balance is S$70.5 billion. The government does not reveal statistics on the annual Medisave contributions paid by Singaporeans, so one estimate is by deducting the 2013’s Medisave balance from 2014’s.

This would suggest that Singaporeans paid S$5.6 billion into Medisave in 2014 (Note that this figure would be higher but there is no publicly-available way to verify.)

In Singapore, citizens pay S$5.6 billion into the Medisave national health insurance in 2014 (by this estimate). But they got back only S$0.852 billion.

Source: Ministry of Health, Singapore – Government Health Expenditure and Healthcare Financing Statistics

In Singapore, citizens got back only 15.2% of what they paid.

There is another way to estimate – by looking at the total contributions into the Central Provident Fund (CPF) pension funds. Singaporeans pay for Medisave by channelling part of their CPF into the Medisave.

In 2014, the total CPF balance is S$275.4 billion. The Medisave balance is S$71.2 billion, or 25.9% of the total balance.

In 2014, the total annual contributions into CPF is S$29.7 billion. So, if 25.9% of the total CPF balance is made up of Medisave, and if we assume that Medisave also makes up the same 25.9% for the annual contributions, then Medisave contributions would comprise S$7.7 billion. (Note again that this figure would be higher as the CPF was set up in 1955 but the Medisave was implemented in 1984, which means that the Medisave makeup of new annual CPF contributions would be higher than the total CPF balance.)

In Singapore, citizens paid S$7.7 billion into the Medisave national health insurance in 2014 (by this estimate). But they got back only S$0.852 billion.

Source: Central Provident Fund Board – Members’ Accounts Statistics

Which means that in Singapore, citizens got back only 11.1% of what they paid.

However, taking note that Medisave contributions in 2014 are likely to be higher than both the S$5.6 billion and S$7.7 billion figures, Singaporeans would be getting back even lesser.

If Medisave contributions go above S$8.5 billion, then Singaporeans were only getting back less than 10% of what they pay. Socio-economic blogger Leong Sze Hian estimated that Singaporeans paid S$10 billion in contributions into Medisave in 2014.

If so, if Singaporeans paid S$10 billion into Medisave but only got back S$0.852 billion, then Singaporeans were only getting back 8.5% of what they paid.

What do you have to take away from the above discussion?

In Taiwan, citizens get back 95% of what they pay. In Singapore, the government profits from 91% of what citizens pay, citizens only get back 9%.

There are two points to take note of for Medisave:

(1) One point to note is that the Medisave is more convoluted than the national health insurance schemes in the other countries. Other than Medisave, there is also the MediShield national health insurance which Singaporeans have to pay into – and which the government profits from as well (as you will see later).

Whereas in other countries, the payouts from the national health insurance goes directly into paying for healthcare expenses, the Singapore government developed a two-step catch system where the premiums paid to the first national health insurance scheme (Medisave) is also used to pay a second one (MediShield), and since both schemes profit from the premiums paid and accumulate surplus, it creates a two-step catch where the government profits from premiums paid by citizens on two levels.

In 2014, S$766.5 million was withdrawn from Medisave to pay for MediShield premiums, which is as good as diverting 8% of Medisave premiums into MediShield which the MediShield profits from. In the same year, only S$448.1 million was withdrawn in MediShield claims and if you factor in that MediShield earns surpluses, this means that if we are to frame the argument to look at how much citizens get back from MediShield, in the context of Medisave premiums paid (so as to fit into the discussion in this article), citizens might only get back another 1% to 3% (which is negligible) – the government still profits from about 90% of Medisave premiums paid.

(2) Another point to take note is that whereas in the other countries, premiums paid for national health insurance are returned in full, in Singapore the government profits from premiums paid into Medisave, and accumulates surpluses.

Therefore for Singapore’s national health insurance, there is another way to look at the discussion – in 2014, there was a total Medisave surplus of S$70.5 billion but Singaporeans only got back S$0.852 billion.

This means that Singaporeans only got back 1.2% of what they paid.

Indeed, as mentioned above, Singaporeans are not just getting a very bad deal from Medisave. We are also getting a very bad deal from MediShield.

Thanks to a question by the Worker’s Party’s Gerald Giam who asked in parliament in 2011 how much Singaporeans were paying in MediShield Basic premiums and how much claims we were getting back, we now know that the government has been giving back lesser and lesser to Singaporeans, out of how much it collects.

From getting back 83.8% of what we paid in 2004, Singaporeans only got back 47.2% in 2005 and 53.1% in 2008.

This went down even further in 2013.

The Singapore Democratic Party (SDP)’s Chong Wai Fung gave a speech in 2014 and revealed:

For the past 11 years, Medishield has an average medical loss ratio of 63%. For 2013, the medical loss ratio reached a historical low of 43%! In other words, for every $100 Medishield collected, it paid out only $43 and pockets $57! I think very few businesses in the world can achieve this level of profit.

In a speech given by Mr Giam in parliament in 2014, he added that, “this is the lowest loss ratio since 2001.”

 

As we have seen above, in the other countries, of S$100 that was collected in premiums, about all the S$100 would be returned to citizens.

But not in Singapore.

MediShield only gave back S$43 and worse still, Medisave only gave back a miserly S$9.

Mr Giam asked in parliament:

Is there really a need to set aside so much in reserves? While this manages the risk for the Fund, it could be placing an unnecessary premium burden on policyholders.

If the pace of reserves accumulation can be adjusted to be more in line with MAS requirements, premiums can be made more affordable.

Mr Giam also said:

Let me state for the record that I believe that MediShield Life should be financially sustainable in the long term, and that enough reserves must be set aside for temporary spikes in claims and long term liabilities.

However, there is a big difference between setting aside enough for reserves, and setting aside too much for reserves. Setting aside enough ensures that the MediShield Life Fund remains solvent even when claims in a particular year are higher than expected. Setting aside too much could mean collecting excessive premiums to cater to an extremely unlikely, but catastrophic event.

On his blog, Mr Giam said: “I leave it to Singaporeans to assess whether or not they consider $1.5 billion to be “a lot more” in premiums than pay-outs.”

So, what do you think now – with the background knowledge of what the other countries are doing? Is the Singapore ruling government collecting excessive premiums from Singaporeans for Medisave and MediShield?

In its National Healthcare Plan, the Singapore Democratic Party said: “Instead of locking up our monthly Medisave contributions in individual accounts, the money should be pooled together towards a proper National Health Insurance scheme that adequately covers all medical bills, with affordable co-payment.”

Source: The SDP National Healthcare Plan – Caring for All Singaporeans

The Singapore Democratic Party (SDP) pointed to the example in America, where:

Under ObamaCare, private profit-making health insurance companies are restricted in the amount of profit they can make out of health insurance schemes.

ObamaCare mandates by law that the total pay-out for claims has to be at least 80% of the total premiums collected. This ensures that not too much premium is collected so that the insurance companies do not make too much profit (in this case a maximum gross profit of 20% before expenses).

However, in Singapore, the government is taking as much as more than 57% in profits from MediShield and as much as more than 90% in profits from Medisave!

The Singapore Democratic Party (SDP) thus said: “Until this government commits to putting in place measures like the capping the MLR (Medical Cost Ratio) to ensure that we do not overpay for MediShield Life, there remains no assurance that huge profits will not continue to be made in the name of national health insurance in Singapore.”

Source: The SDP National Healthcare Plan – Caring for All Singaporeans

In Germany, the government uses the reserves to pay for the citizens’ healthcare and to even return to the citizens bonuses.

In Singapore, the government uses the citizens’ healthcare insurance to pay for the reserves.

Is this ethical?

But where do the reserves go? Nobody knows.

And if the Medisave is not paying for your healthcare, then what is it paying for?

In his reply to Mr Giam’s question in parliament, then-Minister for Health Gan Kim Yong said: “MediShield operates on a not-for-profit basis and … premiums will be kept affordable and yet ensure the fund remains solvent.”

But from the evidence we have so far, it is clear that it is not just MediShield, but even more so for Medisave, that operate on a for-profit basis. In fact, premiums under the current ruling People’s Action Party (PAP) government is actually NOT affordable.

What solutions then has the Singapore Democratic Party (SDP) propose?

The Singapore Democratic Party (SDP) wants to make healthcare truly affordable.

The Singapore Democratic Party (SDP) wants to reduce contribution rates for national health insurance, from the S$1,680 to S$3,360 that Singaporeans have to pay into Medisave every year, and reduce it to between S$0 and S$1,800 under the SDP’s National Healthcare Plan.

Premiums would be progressively tiered by income, and low-income families with incomes of less than S$2,000 would not need to pay premiums.

It is clear that this is doable and should be done – Singaporeans are currently over-paying for the premiums and the government is profiting excessively from Singaporeans’ contributions.

Source: The SDP National Healthcare Plan – Caring for All Singaporeans

Not only that, the Singapore Democratic Party (SDP) also proposed caps as to how much Singaporeans have to pay for healthcare in a year – Singaporeans need only pay a maximum limit of S$2,000 every year for chronic and major illnesses. The rest would be fully subsidised.

For Singaporeans who earn between S$800 and S$1,500, they would only need to pay a maximum of $500 every year, with the rest fully subsidised.

And for Singaporeans who earn less than S$800 or are on social welfare benefits, the Singapore Democratic Party (SDP) proposes to fully subsidise these Singaporeans.

Source: The SDP National Healthcare Plan – Caring for All Singaporeans

As I had shown in my previous article, the SDP’s proposal is in line with what the other countries are doing – citizens in the other Asian Tigers and Japan all only need to pay up to a maximum cap on healthcare.

It is only in Singapore where there is no cap on healthcare costs but under the current People’s Action Party (PAP)’s policies, Singaporeans instead can only claim a limit for healthcare.

And have to pay excessive premiums on Medisave and MediShield which are not returned to Singaporeans but which the government takes as profit.

Why did you choose to hurt yourself?

I came down with flu yesterday and had to see the doctor. The bill came up to quite a hefty sum.

So it set me thinking – you feel very insecure to see a doctor in Singapore. It is so expensive here and there is no cap on how much Singaporeans and the people living in Singapore have to pay for healthcare.

So, I decided to take a look at what the other Asian Tigers (Hong Kong, Taiwan and South Korea) and Japan do with their healthcare system.

This is what I found.

In Hong Kong, there is a cap on how much you have to spend on healthcare. In Singapore, I had to pay more than S$100 when I go to A&E. In Hong Kong, this is only less than S$20.

Source: Hong Kong Hospital Authority Fees and Charges

There is also a cap in Taiwan – you only need to pay S$6 to go to A&E at a district hospital and less than S$13 at a regional hospital. It is even cheaper if you are not going to A&E.

To see a doctor at a clinic, you just need to pay S$2.

Source: National Health Insurance Administration, Ministry of Health and Welfare – Copayments

There is also a cap on hospital bills of S$2,340 every year in Taiwan. You do not have to pay more than that if your bill goes above that.

Source: National Health Insurance Administration, Ministry of Health and Welfare – Copayments

In South Korea – again, there is a cap! – you do not have to pay more than $1,340 a year for all healthcare if you have an income grade of Grade 1.

Source: 2014 National Health Insurance System of Korea – Universal Health Coverage for the World

And in Japan – if you earn $3,345 or less, you do not have to pay more than S$745 a year for all healthcare – again there is a cap.

Not only that, the cap, or the ‘Cost-Sharing Maximum Amount’, can be combined and shared among members in the same household, and the cap is also reduced for longer term recurrent health needs.

Source: IBM Japan Health Insurance Association – When you incur high medical costs

Then I looked back at Singapore.

There are no caps as to how much Singaporeans have to pay (and pay).

Instead, there are limits to how much Singaporeans can claim!

You can only claim a limited amount from the Medisave health insurance.

Source: Singapore Ministry of Health Medisave Withdrawal Limits

You can only claim a limited amount from the MediShield Life health insurance.

Source: MediShield Life Information Booklet for the Newly Insured

Which means that because there is no cap on how much Singaporeans have to pay for healthcare, they can go broke.

Indeed, the Worker’s Party’s Gerald Giam revealed that in 2012, “over 2,400 MediShield policyholders made co-payments of over $10,000 each“.

Mr Giam asked:

These co-payments can be financially crippling on their own. Would MOH (Ministry of Health) explore the introduction of an annual cap on out-of-pocket co-payments made by each patient. Any medical bills above the cap would be borne by the Government.

Such schemes are a feature in most developed countries, including Japan, South Korea and New Zealand. It is also one of the key consumer protections in the Affordable Care Act in the US.

An annual cap on out-of-pocket payments will limit the financial risk that individual patients are exposed to, and help allay the anxiety of many Singaporeans about uncertain medical expenses.

But Minister for Health Gan Kim Yong from the ruling People’s Action Party (PAP) rejected introducing a cap on hospital bills.

He said that this is because “any expenses above the cap will be “free” to the patients“.

But where more than 2,400 Singaporeans have to pay more than S$10,000 for their hospital bills and where many cannot afford, can such an argument be justified?

The Worker’s Party’s Mr Giam also pointed out:

From the Government’s perspective, co-payments are necessary to discourage over-consumption. The Government’s fear is that “free” healthcare will escalate costs, and become fiscally unsustainable.

However, people do not consume healthcare like they do other goods and services. Most people visit doctors rather grudgingly – usually when they fall sick and have obvious symptoms. Demand for healthcare is therefore not unlimited.

He added:

The lesson from these two experiments, is that if co-payments are too high, poorer patients may be deterred from seeking necessary treatment. Similarly, it is difficult enough to get patients to adhere to their prescriptions, and high co-payments could make it even harder. This could have knock on effects like higher rates of hospital re-admissions, which will cost both the patient and the system more in the long run.

The Government’s claim that no one will be denied healthcare because of inability to pay is cold comfort for some Singaporeans who regularly forego medical appointments or cut back on prescribed medication because of the high costs and the difficulty in obtaining financial assistance.

Which is why the Singapore Democratic Party (SDP) proposes a cap of $2,000 on hospital bills – Singaporeans should not need to pay more than S$2,000 for healthcare in a year.

Source: The SDP National Healthcare Plan – Caring for All Singaporeans

And if you have to go to the hospital every year for a chronic or recurrent illness, the SDP proposes that from the third year onwards, you would not need to pay more than S$500 a year.

The SDP wants to make lives better for Singaporeans.

Why did you choose to hurt yourself?