The necessary privileges of citizenship

I was invited to be a studio guest on Channel NewsAsia’s BlogTV on 27 August 2009. This was my second time on the show. The topic for this discussion was titled, “We want more… privileges!”

This article first appeared in Hammersphere.

I was invited to be a studio guest on Channel NewsAsia’s BlogTV on 27 August 2009. This was my second time on the show. The topic for this discussion was titled, “We want more… privileges!”

Overall, I have no doubt that Singaporeans enjoy the most privileges. In areas of public housing and health care, Singaporeans do get more subsidies than permanent residents (PR) or foreigners.

But in the area of employment, the playing field is not level enough for Singaporeans. In our polytechnics and universities, Singaporeans are not being subsidised enough for the tuition fees, while foreigners are being subsidised too much, in my opinion.

Employment: The unlevel playing field

The current system makes it cheaper to hire foreigners or PRs, compared to Singaporeans.

Employers do not have to make employer CPF contributions for expatriate employees. The employer CPF contribution rate for new PRs is much lower (4% for the first year and 9% in the second) than for Singaporeans. So effectively, foreigners are up to 14.5% cheaper to hire than Singaporeans. This is especially so for Employment Pass holders, where there is no foreign worker levy applied to them.

In addition, foreigners do not have to make the mandatory 20% employee CPF contribution, so their asking salaries can be lower. Singaporean men have to be given up to 40 days of leave per year for reservist training. This all adds to the cost of hiring Singaporeans and makes us uncompetitive through no fault of our own.

Suggestion: Apply the same employer CPF across the board

For foreigners, the 14.5% employer CPF contribution should be paid by their employers. It could go into a fund that would be deposited into the employee’s CPF account when he takes up PR or citizenship, or go to the Skills Development Fund if he decides to leave the country. This serves a dual purpose of levelling the playing field and helping to fund skills upgrading for Singaporean workers.

It was argued during the show that it is unfair to take away foreign employees’ hard-earned money. But the fact is that currently, employers are not obliged to pay any of this 14.5%.

For PRs, employers should be required to make the full 14.5% employer CPF contribution the moment an employee becomes a PR, instead of the current graduated increments starting at just 4% for the first year.

Tertiary fees: Taxpayers subsidising foreigners

It is puzzling why the Ministry of Education chooses to subsidize foreigners’ education in our local polytechnics and universities so excessively.

In the National University of Singapore (NUS) for engineering courses, Singaporeans pay $6,360, PRs pay $7,000 and foreigners $9,540. This includes a tuition grant from the Ministry of Education (MOE) to the tune of $26,400 each, which is available to all students, local or foreign.

This means that over a 4-year stint as an undergraduate, a foreign student enjoys $105,600 in subsidies from the government. This is a huge bill for taxpayers!

In contrast, in the University of California, residents pay US$8,700 per year in tuition, while foreigners pay US$30,721. That’s more than three-and-a-half times higher fees that foreigners have to fork out. International students are not eligible for any government-funded tuition grants.

Even in our polytechnics, all foreign students are given a $14,231 per year tuition grant by MOE, which is the same as the grant given to Singaporeans. As with NUS, the only condition is that they must agree to work in Singapore for 3 years after graduating.

In most other developed countries, foreign students fund the fees of local students. In Singapore, taxpayers fund the fees of foreign students. This doesn’t seem right.

Suggestion: Remove foreigners’ tuition grant to benefit Singaporeans

The tuition grant should be gradually removed for foreigners, with the extra funds used to provide grants to all students from lower and middle income Singaporean families

Education is not welfare. It is a very worthwhile investment in our future generations and our future workers. I appreciate that our universities claim that no student will be denied an education because of financial difficulty, but I feel that more can be done to help low and middle income families pay for tertiary education. This will help tremendously with social mobility.

While I support the government’s goal to make Singapore an education hub, we should do this by improving the quality of education here, not paying for foreigners’ education with taxpayer money.

Are Singaporeans anti-foreigner?

Generally I don’t think Singaporeans have anything personal against foreigners. I certainly can’t claim that notoriety since a large proportion of my close friends and colleagues are non-Singaporeans. But many of us disagree with the government’s overly liberal immigration policy.

We cannot talk about benefits to Singaporeans, PRs and foreigners in isolation from the large proportion of non-Singaporeans living in Singapore. In Singapore, 35% of residents are foreigners. Singapore citizens (including naturalised citizens) make up only 65% of the population.

Our proportion of immigrants is 50% higher than that of Australia, twice that of Canada, and three times that of the US, but we have so much less space and resources. We are already the second densest populated country in the world.

In other developed countries, PRs generally get the same benefits as citizens. But foreigners don’t make up such a high percentage of the population and are not increasing as such a high rate.

It is not surprising that that many Singaporeans are uncomfortable with the huge influx of foreigners. All these plans to increase Singapore’s population to 6.5 million or more makes Singaporeans very uneasy.

I emphasised on the show that I agree that foreigners are necessary for our economy, particularly since Singaporeans are not replacing themselves by having enough children. However, this does not mean that we should open the floodgates to let in so many foreigners. A little more balance and common sense is needed.

Citizens’ rights and privileges

It was argued during the show that foreigners and PRs should get the same subsidies and privileges as Singaporeans, because they pay the same taxes. This is not the right way of thinking. You cannot measure privileges received based on the individual’s economic contribution to the country. If that’s the case, then poor Singaporeans should be thrown out of their HDB flats, because they usually don’t need to pay income tax.

Instead we should recognize that there are both obligations (e.g., NS) and privileges that come with citizenship. Singaporeans have made a commitment to this country – a commitment that no PR can claim to have made until he takes up citizenship and renounces all foreign citizenships.

As such, higher subsidies and more privileges compared to foreigners and PRs are rights of all Singapore citizens.

14 thoughts on “The necessary privileges of citizenship”

  1. Hi Gerald,
    Well argued.
    I was also approached but declined due to various reasons.
    I see that I would not have as much to contribute as yourself.

  2. Hi Dr Huang,

    Actually what I said on the show was a small fraction of what I wrote above. There wasn’t enough time and I wasn’t succinct enough in my comments. Oh well, that’s TV.

  3. Hi Gerald,
    The second comment was not by me.
    I think we have an imposter here ( no-duff).
    It seems innocuous enough but this goes to show how easy the net can be abused.
    You can contact me if you want to confirm that the first comment and this one is bona fide.
    Dr.Huang

  4. That’s was a great show but I felt that you did not have enough time to say what you could have said.

    I’m curious. Did you ask the Malaysian lady why she had not taken up PR?

    Also, I feel that you should have brought up how NS provides tangible benefits for PRs and foreigners. For example, apart from the obvious national security benefit of NSFs serving in the SAF, a significant fraction of SPF and SCDF is made up of NSFs who are effectively subsidizing the PRs and foreigners.

  5. I really enjoy the way you put the points across and of course the research that you have done.

    keep it up mate!

  6. Hi gerald,

    I did not know that a foreign student receives subsidy, let alone that much subsidy from the state. Its poor policy.Back in NUS as an undergrad, it was difficult for Singaporean students from less well off families to receive NUS bursaries because the amount set aside for each year for bursaries was not enough to be distributed to all applicants. The success rate was about 30-40% i think, back in 2006, when I was in my final undergrad year. This policy should really be rethink, not because this is an exercise in unthinking, angry, knee-jerk nationalism, but because Singaporean students are more likely to be staying here in the long term or permanently,than foreign students, hence making greater direct contribution to Singapore.

  7. Fox – We asked her after CNA went off air, and we continued on the webcast. She said that she couldn’t see any advantages of becoming a PR at this point, since she was not planning to buy an HDB flat.

    Yes I didn’t get across all the points I wanted to. I reviewed the recording, and realised that there were opportunities to do so but I fluffed it by repeating my earlier points. I’ll learn next time.

    Good point about NSFs protecting foreigners for “free”. I never saw it that way but I’ll use that point for future arguments. Thanks!

    ah gan – Thanks man!

    fairoz – I think the tuition grant was there even during your time. It’s just that it is transparent to both you and the foreign students — you just pay the difference between the actual tuition fees (which amounts to $30k+ a year) and the MOE tuition grant.

    I’m saddened to hear that the success rate for the NUS bursaries was only 30%. I wonder if you could help me find out what the success rate is now. Your point about Singapore students staying here longer is an excellent point, which I will also add to my repository of arguments.

  8. Actually there is a solution to make flats more affordable to young locals without devaluation the value of existing flats.

    Your government can waive the profiteering ($172,398) when selling to young Singaporeans and stop new owners from reselling their flats for ten years.

    But I am skeptical if your government will do this to help young Singaporeans. I mean, they will lose the chance to earn so much money.

    Really feel sad for you people.

  9. Interesting: in my finance software and in computing my income, I include the CPF as an income
    So there is no difference in income: there is a difference in disposable income
    Most foreigners I know are a lot happier to get CPF than not to get it: getting CPF means an EXTRA 10% from the employer and not the reverse

    I think Singaporeans do not hate foreigners: they just don’t like the fact that they cannot vote and take it out on the foreigners
    They want to have the freedom of the foreigners and a real cushion from the government

  10. You made various fine points there. I did a search on the topic and found the majority of folks will have the same opinion with your blog.

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