Ian On The Red Dot

I was having lunch with a friend today when the topic of foreign students in Singapore came up. I have the privilege of working with some of the chaps which have riled certain segments of the population. One of the complains Singaporeans have against such students is that a significant number of them are here on scholarship where their fees are fully paid for by the government of Singapore without a bond. The disgruntled feel that the government should be spending that amount of money on Singaporean students instead.

Two of the reasons for the negative sentiments about this form of government expenditure that I can think of are:

1. The Singaporean government should take care of Singaporeans first.
2. The money that the Singaporean government spends have come from Singaporeans.

For reason one, I have always believed that by getting more foreigners into Singapore, the government is increasing both the labour and talent pool, which will lead to more (and better) companies being setup in Singapore which lead to more (and better paying) jobs for Singaporeans. The argument for how foreign students will eventually help the Singapore government take care of Singaporeans first is more nuanced than what I have written above. This post isn’t about reason one, so I’ll leave it for now.

It is reason two that this post has been written.

One of the arguments I have heard about why the Singaporean government should not spend on foreign students is that the money belongs to Singaporeans. Why does the money that the Singaporean government use for the students belong to Singaporeans? Is it because we pay income tax? However there are other forms of taxation. Two of them is GST and corporate tax.

The students that eventually work in Singapore will be paying GST every time they consume a product or service in Singapore. The companies they work for will pay corporate tax. If these students help increase the amount of GST and corporate tax in Singapore by an amount greater than their school fees and other expenses spent on them, can it be said that the investment on them was worth it?

More importantly, won’t the students eventually pay for their own education?