Singapore PM: Govt not ideologically opposed to any proposal to fortify social safety nets but it mustn’t create new problems

Singapore should be prudent with its reserves when funding social support measures, and not think of itself as ‘inheritors spending what we have been lucky enough to be endowed with’, Prime Minister Lee Hsien Loong said. — TODAY pic
Singapore should be prudent with its reserves when funding social support measures, and not think of itself as ‘inheritors spending what we have been lucky enough to be endowed with’, Prime Minister Lee Hsien Loong said. — TODAY pic

SINGAPORE, Sept 2 — The government is not “ideologically opposed” to any proposal to buttress Singapore’s safety nets while it takes time to assess how things unfold after the pandemic, Prime Minister Lee Hsien Loong said in Parliament today.

As a matter of principle, however, such moves should be funded out of current revenues instead of past reserves, Lee stressed. He was speaking on the third day of a parliamentary debate on President Halimah Yacob’s address at the reopening of Parliament last week.

“We should not think of ourselves as inheritors spending what we have been lucky enough to be endowed with. Rather, we should take the attitude of our founders... Whatever reserves we have, big or small, let us not think of touching them in normal times,” he said.

Taking aim at the Opposition, which had called on the government to reveal the size of its reserves in the past, Lee said: “Basically, they are asking, ‘I have something in the bank already. How much of that can I touch?’

“This was not the attitude of our founders who were building for the future but the attitude of inheritors who think they have come into a fortune, and want to consume the fruits of their predecessors’ labours.”

This is fundamentally the wrong approach, he added.

Strengthening safety nets in an era of volatility and disruption was a key point in Halimah’s speech last week. She had said that a shift in social policy was needed to give people assurance amid the uncertainties they face, and called for a broadening of the concept of meritocracy.

The need for better social safety nets has been a running theme during the debate on her speech as well, with Members of Parliament (MPs) suggesting solutions such as unemployment support schemes, universal expansions to the Progressive Wage Model and, from the Workers’ Party, unemployment insurance.

In his speech today, Lee sought to keep focus on “pragmatic and empirical” solutions needed to buttress the country’s safety nets.

For older workers, solutions such as unemployment insurance may offer them transient relief, but the government’s position on retraining and upskilling this group can help them get their careers back on track.

“The best unemployment insurance is the assurance of another job,” he said.

 

Low-wage workers have also been supported by policies such as the Workfare Income Supplement and the Progressive Wage Model, which will be extended to more sectors over time, he added.

However, Lee recognised that more still needs to be done ahead, pointing to the greater challenges such as rising healthcare costs and an ageing population, as well as the uncertainties caused by the economic turbulence. 

“The question is: What more will we need to do and what’s the best way to do it?” 

He said that merely floating ideas such as minimum wage and unemployment insurance is not enough, and the impact of these suggestions must be assessed carefully. 

“We must keep an open mind, as we build and improve on the system we have, and consider solutions that can work in our context.

“We must identify pragmatic solutions that will make a real and sustainable difference, and give people justified assurance... and it must not create new problems in the process, for example, by eroding our spirit of self-reliance.”

Self-reliance

The need to ensure individual self-reliance while Singapore forges new social policies is a point that Lee has stressed in the past. 

In a nationally broadcast speech in June, he addressed the nation about the need to create a stronger social compact. While safety nets can improve people’s confidence, Singaporeans must still have the incentive to be self-reliant and to “progress through their own efforts”, he said then.

This time, Lee highlighted how extensive social safety nets were not needed in the early decades of nationhood, given the high growth of the economy, jobs and incomes in that era.

“Now, we have moved into a different phase of development,” he said. “Our economy is maturing, incomes are growing less quickly, there is a higher premium on specialised skills and education.”

Thus, Singapore has been shifting its social support approach in the past 15 years or so, he noted. 

The government introduced schemes targeted at those who draw lower income, such as ComCare in 2005, Workfare in 2007, and the Silver Support Scheme in 2016, as well as other broader programmes such as the support packages for the Merdeka and Pioneer Generations.

“Altogether we now spend three times as much on social programmes as we did 15 years ago. These were all peacetime measures. When Covid-19 hit us, they could not be enough,” Lee said.

With Covid-19, the government dug into past reserves to fund emergency measures, including the Jobs Support Scheme and the Self-Employed Person Income Relief Scheme.

“These emergency measures are crucial for now, but they cannot continue indefinitely,” Lee said. “We have to start thinking about the level of social support we will return to after Covid-19 is over.” — TODAY

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