Some tinkering needed to narrow the income gap

I agree that Singapore should not blindly follow the economic policies of North Europe or, for that matter, the formulaic policies of the International Monetary Fund or the World Bank ("The misguided pursuit to be like North Europe"; last Wednesday).

Post-war Europe had pushed for economic growth, but after recovering much of its wealth, started in a more socialist direction, and welfare states emerged.

These policies slowly blunted the competitiveness of their economies, which later suffered when the Asian economies started coming onto the global marketplace.

Singapore, not unlike other successful economies, faces problems such as the inequality of income distribution.

The social effects of this issue have been widely discussed.

Singapore does not have a prohibitively high income tax rate and can probably tax the very rich a bit more, at a rate where some semblance of social equality can be achieved.

There are two areas where additional tax income can be spent, namely, healthcare and education.

Successfully tackling the rising cost of healthcare and education will also go a long way in helping to correct another problem Singapore faces - low birth rates, since parents are most concerned about these two costs.

In this light, I am all for socio-economic tinkering to correct income inequality and to redistribute the money to areas which really need adjustments.

Ong Beng Koon

A version of this article appeared in the print edition of The Straits Times on March 30, 2016, with the headline 'Some tinkering needed to narrow the income gap'. Print Edition | Subscribe