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25-08-2019, 09:59 AM
Indeed. Where about 35% of HK's government revenue is funded by property-related income (land sales and stamp duties), the same for SG is only 6% (stamp duties). One of the implication of this is, as has been mentioned by weijian, that HK government will want to maintain, if not increase, land prices.
The implication for SG is that, since it property-related income only account for a measly portion of its government revenue, there has to be other sources of income. Perhaps most notable is the GST, which accounts for 15% of SG's government revenue. Does HK have GST? No. Another notable source of income for SG government is the investment return from its SWFs, which contributes about 20% of the revenue. This source of funding could be higher, since the 'payout ratio' from the SWFs are only 50% of its expected long-term returns.
SG's SWFs, and perhaps GST, will be increasingly important sources of revenue if other other traditional sources of income -- such as income tax and corporate tax -- is not raised, and expenditures continue to grow.
There has been mention of financing infrastructure spending by selling bonds. I think the present environment is a good time to do so.
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I do not think SG is "fairer" because of "meritocracy."
My opinion is that SG is "fairer" because of 1) its effort to uplift people's income (through emphasis on alternate education pathways, workfare, skillsfuture, and of course, creating the necessary environment for business investments), and 2) its effort/willingness to share a greater portion of wealth with those who have 'fallen behind/not succeeded' (such as Pioneer Generation, Merdeka Generation, and the generous amounts of flat subsidies for lower income groups, amonst others).
These two points are actually contrary to how an ideal type meritocracy may work; you do it on your own, and if you succeed, you deserve to be rewarded for your merits/higher ability. Relying on such logic, I may instead offer subsidies to higher income earners, because clearly, they are of 'higher merit.' The lower income? Those bums. What have they done to deserve anything?
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As for the well-connected getting a piece of the lottery pie, I'm not sure. It is rational for a system to reward individuals who are aligned and loyal to preserving/enhancing the system's long-term prosperity. But the purpose of a re-distribution is also to create inclusiveness. So there has to be a balance.
In any case, I believe that, just by being born in SG -- regardless of whether one is well or poorly connected -- an individual has a higher probability of, and propensity for, economic prosperity, compared to almost anywhere else on earth. Where else can you find so many asset-rich individuals well on the way to FIRE (if they aren't already there), on a per capita basis?
The implication for SG is that, since it property-related income only account for a measly portion of its government revenue, there has to be other sources of income. Perhaps most notable is the GST, which accounts for 15% of SG's government revenue. Does HK have GST? No. Another notable source of income for SG government is the investment return from its SWFs, which contributes about 20% of the revenue. This source of funding could be higher, since the 'payout ratio' from the SWFs are only 50% of its expected long-term returns.
SG's SWFs, and perhaps GST, will be increasingly important sources of revenue if other other traditional sources of income -- such as income tax and corporate tax -- is not raised, and expenditures continue to grow.
There has been mention of financing infrastructure spending by selling bonds. I think the present environment is a good time to do so.
===
I do not think SG is "fairer" because of "meritocracy."
My opinion is that SG is "fairer" because of 1) its effort to uplift people's income (through emphasis on alternate education pathways, workfare, skillsfuture, and of course, creating the necessary environment for business investments), and 2) its effort/willingness to share a greater portion of wealth with those who have 'fallen behind/not succeeded' (such as Pioneer Generation, Merdeka Generation, and the generous amounts of flat subsidies for lower income groups, amonst others).
These two points are actually contrary to how an ideal type meritocracy may work; you do it on your own, and if you succeed, you deserve to be rewarded for your merits/higher ability. Relying on such logic, I may instead offer subsidies to higher income earners, because clearly, they are of 'higher merit.' The lower income? Those bums. What have they done to deserve anything?
===
As for the well-connected getting a piece of the lottery pie, I'm not sure. It is rational for a system to reward individuals who are aligned and loyal to preserving/enhancing the system's long-term prosperity. But the purpose of a re-distribution is also to create inclusiveness. So there has to be a balance.
In any case, I believe that, just by being born in SG -- regardless of whether one is well or poorly connected -- an individual has a higher probability of, and propensity for, economic prosperity, compared to almost anywhere else on earth. Where else can you find so many asset-rich individuals well on the way to FIRE (if they aren't already there), on a per capita basis?