Coronavirus pandemic: Supplementary budget debate

NMP moots basic income proposal

After taxes, the less well-off will benefit more from the scheme while the high-income will help to finance it. ST PHOTO: LIM YAOHUI

Give all Singaporeans a universal basic income for the duration of the Covid-19 crisis, to assure them their basic needs will be met even if they lose their jobs, said Nominated MP Walter Theseira.

Under his proposal, dubbed the Majulah Universal Basic Income (Mubi) Scheme, all Singaporeans - including children and retirees - will get $110 a week for 12 weeks. This will be considered taxable income and cost $4.62 billion.

But the money will not come from Singapore's reserves or other sources of tax revenue, he told the House yesterday.

Instead, the scheme will be funded by a temporary personal income tax increase of 4.25 per cent. Taxes will be paid only next year, when the economy is expected to have recovered. After taxes, the less well-off will benefit more from the scheme, while the high-income will help finance it.

"In effect, Mubi will distribute money from the future, when the economy and jobs are expected to recover, to the present, when many Singaporeans are facing immediate cash flow problems as they lose jobs or face sharp reductions in income," said the associate professor of economics at the Singapore University of Social Sciences. He worked with Dr Ong Qiyan, deputy director of research at the National University of Singapore's Social Service Research Centre, on the proposal.

In a policy paper, they said payouts should be weekly and automatic, without any means testing. "This is to avoid any possible gaps in coverage. Incomes and jobs will be volatile over the next few months," they said.

Having a universal basic income scheme will also help nudge Singaporeans to follow advice to stay at home, they added. For example, those who provide services such as home repairs may not feel they can take adequate precautions, but are reluctant to suspend their services due to the loss of income.

The authors noted that although the scheme is designed to avoid tapping past reserves or other tax revenue, the Government must be prepared to pay the difference if the proposed rise in income tax revenue is less than expected.

It is "financed on the principle of solidarity, because all Singaporeans must face the Covid-19 pandemic together". "All Singaporean taxpayers are asked to contribute towards financing the scheme," they said. "Some will give more, but all will give some."

Responding, Mr Heng said he fully supports the spirit of the suggestion. "Those who have more should support those who have less. Such solidarity is especially needed in these difficult times."

He said some government support schemes have to be broad-based, so that help can be quickly channelled to people. Those who do not need cash payouts from the Government should share it with those who need it more, by donating to or the Community Chest's Courage Fund, or directly sharing it with others, he added.

Join ST's WhatsApp Channel and get the latest news and must-reads.

A version of this article appeared in the print edition of The Straits Times on April 08, 2020, with the headline NMP moots basic income proposal. Subscribe