DPM Tharman Gave A Lengthy Interview About Singapore’s Policies
Recently, DPM Tharman gave a really long interview to The Straits Times about Singapore’s policies on social mobility, healthcare and an ageing population, amongst other things.
When we say long, we mean really long. So long that the whole thing had to be edited and abridged.
Well, we at MustShareNews know why you’re here.
We’ve done you, the reader, the handy task of going through the transcript, and have included the important points for your reading pleasure:
1. A strong economy also improves the well-being of Singaporeans
The first point brought up in DPM Tharman’s super-duper long interview was that social and economic strategies are linked.
This simply means that a vibrant economy cannot be achieved without social well-being, and vice-versa. At its heart, creating new jobs isn’t just about improving the economy, but also about improving the well-being of Singaporeans.
Hence our efforts to build an innovative economy, and to provide quality jobs for all, are not just an economic strategy. They are ultimately also the most important social strategy. That’s how you make possible a broad-based improvement in people’s well-being.
On the other hand, achieving quality social well-being through housing and education helps Singapore’s economy progress.
Don’t believe him? Well, he even provides an example of how this has been done, through housing grants.
It’s still a source of amazement to the rest of the world that the bottom 10 per cent of our population has an 84 per cent home ownership rate. Our bottom 20 per cent has an 87 per cent home ownership rate. Not much lower than the national average which is about 90 per cent.
And it comes about because of a system of grants to help them to own their homes. So even for those with very low incomes, the grants allow you to own a two-room flat…
So basically, even those with low incomes are able to afford housing, which is usually rare for low-income groups elsewhere in the world.
In a nutshell, having a society where even low income groups are able to afford property creates a lower spike in home values, keeping the overall economy stable.
2. To keep taxes low, the government can’t be expected to pay for 100% of healthcare costs
A well-known fact about Singapore is that we have an ageing population.
It’s a real success of our times that people are now living much longer. It’s a real success. It’s true internationally, but we take special pride in the fact that we have one of the longest lifespans in the world. It’s increasing significantly, decade after decade. It is an achievement, but we have to enable people to make the most of life in their senior years.
Of course, as he points out, it’s a great thing that Singaporeans are living longer. But longer lifespans mean that more must be done to ensure that the ageing population live comfortably.
As DPM Tharman puts it, by 2030, one out of every four Singaporeans is going to be above the age of 65.
Coping with an ageing population raises all sorts of issues, like higher costs for everyone else in order to support the aged.
These higher costs he refers to are taxes. Comparatively, in Western countries, 22% consumption taxes are commonplace, while Singapore only has a 7% GST. The ultimate goal for Singapore is to be able to sustain this low tax figure, while having enough money to offset welfare programs.
He believes that government spending, such as subsidies, should not be relied on 100% to fund healthcare, otherwise the costs will skyrocket.
We must get the balance right in how healthcare is paid. How much is paid by people out of their own pocket or through their Medisave accounts when they get treated, where they know that they are paying something themselves. How much they pay in advance through insurance, where everyone contributes to the pool and when you get a major illness, you draw more from the pool. And thirdly, how much is paid by Government out of the taxes everyone pays.
The solution to this is co-payment — where citizens take on a higher responsibility through insurance programs such as Medishield Life, so that the contributions are more equal and risks are pooled between Singaporeans.
This also helps to keep taxes at reasonable levels.
3. Achieving social mobility is a major challenge
DPM Tharman agrees that apart from an ageing population, social mobility is another great challenge that Singapore faces.
He even goes so far as to say,
They are not one-off challenges, not challenges for 10 or 15 years, they are challenges for decades to come.
In short, social mobility refers to the ability of an individual from a certain social class to move upward based on wealth.
We’re all climbing a metaphorical ladder, trying to get somewhere…
The biggest concern is that social class divisions will become so firm that people cannot climb up this ladder. Meaning, the poor stay poor while the rich become richer, but the poor never become rich if social mobility is lacking.
We’ve got to build up the infrastructure, build up the culture amongst the employers, and we have got to build up that social culture where you keep pushing your potential though life. That too is fundamental to social mobility – becoming a meritocracy of skills, not one based on grades you earn early in life.
This is the idea that people can be improved upon, and that their social skills are valuable too, and not just the grades that they get when they are in school.
However, he hopes that with programmes like KidSTART, which is designed to give low income and vulnerable children a good start in life, social mobility will not be such an apparent issue.
4. Keeping taxes fair for lower-income groups is important
Great news for everyone, because DPM Tharman more or less agrees that taxes should be affordable. Of course, it’s inevitable that taxes will go up, but hopefully not by that much.
Our fundamental approach is to keep our overall scheme of taxes and benefits fair and progressive. Even as we raise taxes, which we must do in good time, we must keep the system fair. That means those who are better off pay more of the taxes and get less benefits. Those with lower incomes pay some taxes – because everyone must contribute – but they get more of the benefits.
Taxes will continue to favour those in the lower and middle-income groups. As it is, for every dollar someone from the lower income group pays in taxes, they get $4 back in benefits.
That amount decreases to $2 for the middle-income group, to keep the balance in favour of income groups on the lower end of the spectrum. This model ensures that benefits go to those that need it the most.
Critically too, we must avoid shifting the burden to our children’s generation, and their children’s generation. It’s a basic conundrum in most democracies: governments don’t want to admit that the system requires higher taxes, but they want to provide additional benefits to voters. The only way you can do both of those things is to borrow more today shift the burden to the next generation. And that’s what’s been happening in a whole range of countries.
He explains it perfectly– in order to provide a better quality of life, the government needs to spend money. The governments don’t want to enforce higher taxes to get this money, or end up borrowing money, which will have a negative impact on the next generation.
Luckily, Singapore has an annual Budget where 17% of revenues come from reserves, meaning Singapore doesn’t have to borrow, or increase taxes.
5. Singapore needs to enhance our trampoline model
The trampoline model isn’t about getting your bounce on.
Instead, it refers to the idea of not only providing people a safety net, but helping them bounce back up when they’re down.
It’s everything from having empathetic teachers and volunteers, starting from early in life, parents’ support groups in schools, where they influence each other, and circles of friends and peers, infecting each other with a positive spirit – rather than the reverse which can easily happen, when a circle of friends gets up to the wrong things. All these things matter. And that’s the quality of the society that we have to build.
DPM Tharman thinks that if people maintain positivity towards each other, such as empathetic teachers being a good influence, it will help increase people’s aspirations.
Kindness goes a long way
If we do not sustain a culture of personal responsibility, you’ll get over time what we see now in several mature societies, which is a hardening of attitudes towards the poor. The cutbacks to welfare that are happening in many countries are not cutbacks of the universal benefits that the rich and the middle-class benefit from, but to the benefits that the poor get.
So that’s why collective and personal responsibility go hand in hand together. With individuals and families taking responsibility, we are more likely to sustain collective support and the majority of people being willing for the state to play an active role to help people in their lives.
His point is that if people are not helpful and encouraging towards one another, divisive cracks can emerge within Singapore.
To counter this, Singaporeans need to take a more proactive stance in helping each other move forward in society.
6. Social class divide is a problem that needs to be dealt with
Surely you remember the recent study that suggested that Singaporeans don’t mix with people from other social classes? Well, it was brought up in the interview.
Ultimately, he agrees that there is a social class divide in Singapore, and that it may potentially worsen over time.
It’s something that’s happened all over the world, as societies become more settled. It means that we have to find every opportunity, early in life and through life to maximise interactions. And even when some people do better than others, we must avoid a culture of elitism. Everyone must take a real interest in others in different stations of life from them. That’s critical.
He does also say that this is a common occurrence all over the world, and simply, more must be done to increase opportunities of interactions between classes.
Another big part of this is being achieved through education, considering that Singapore doesn’t have public and private schools for the wealthy.
We have to ensure that schools around the island provide quality, and become pinnacles in their own right. Rulang was not originally a premier school. And there are several Rulangs around the island which have over time become pinnacles, and become sought after.
He acknowledges that there are “brand-name” schools, but also goes on to say that more measures have to be taken to ensure schools all around Singapore provide the same kind of quality education.
A lot of work to be done
Phew, we’re glad to finally get through that entire transcript.
On a more serious note, more than anything, what his interview reveals is that Singapore is still a work in progress.
Social policies are constantly changing, and no one can really say for certain that they’ll change or remain the same through the years as there’s really no practical way to tell.
We just gotta cross our fingers and hope that we don’t have to start paying more taxes.
Featured image by Prime Minister’s Office, Singapore.