Income Gap And Wealth Gap

During the budget debate, many MPs have spoken on narrowing the gap between the rich and the poor. MP Ms Denise Phua even suggested making the rich pay more income tax. I support her suggestion.

In addition to looking at the income gap, we should also look at the distribution of wealth. This is a more holistic approach.

Is the chart below representative of the scenario in Singapore?

90% of the national wealth is owned by 10% of Singaporeans (the super rich).

10% of the national wealth is owned by 90% of Singaporeans.

Chart 1

This means 1 person is eating 90% of the pie (the big blue part) while 9 persons are sharing the remaining small part which is 10%.

In our national pledge there is this phrase “based on justice and equality”. By looking at the distribution of wealth, can we say we have achieved justice and equality?

If this is the scenario, it shows the imperfection of our system. Much effort must be made to narrow the gap between the rich and the poor. The government has to act not only with the mind but with the heart and soul for the people in order to succeed.

Of course, changes need time. Changes to policy-making and implementation are not instantaneous. However, if the government can take decisive steps and work together with the people, we can look forward to a fairer distribution of wealth as shown in the chart below.

Chart 2

Can this be the scenario for the future?

70% of the national wealth is owned by 10% of Singaporeans (the super rich).

30% of the national wealth is owned by 90% of Singaporeans.

The chart 2 shows a higher percentage of wealth owned by 90% of Singaporeans as compared to Chart 1.

You may question that the above chart is far from the ideal scenario as it shows that the majority of the wealth is still owned by the few super rich. However, as mentioned previously, change requires time. If the sharing of wealth can move from the scenario in Chart 1 to the scenario in Chart 2, it is an improvement and a step in the right direction. Due to more equal wealth distribution, a greater number of people can be lifted from poverty.

To conclude, I cite the quotation by Sri Aurobindo below to motivate us to create a better society.

“The existence of poverty is the proof of an unjust and ill-organised society, and our public charities are but the first tardy awakening in the conscience of a robber.”