Prime Minister Of Denmark Says It Will Be Difficult To Apply Danish Policies In Singapore

In an interview with Channel NewsAsia (18 Nov), Danish Prime Minister Lars Løkke Ramussen revealed that policies of the Scandinavian Model will not be applicable to a Singaporean society.

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Of course, with another potential tax rise in Singapore, everyone ideally expects Singapore to have higher public policy standards such as free healthcare and education — just like the Danes.

Unfortunately, even the Danish Prime Minister says policies that worked in Denmark would not have worked for us.

Differences in societal circumstances means you “can’t copy-paste” Scandinavian Model

Upon being asked if Danish public policies could apply to countries like Singapore, Mr Rasmussen replied that he does not believe that an exact duplication will be effective.

Because after all,

[That’s] why its called “Scandinavian”

PM Rasmussen elaborated that although Denmark is a cosmopolitan country, the nation is still largely united in terms of values and interests. The Scandinavian Model is then created to suit this commonality.

In a multi-cultural society like Singapore, priorities and values differ amongst various groups of people. Hence, policies need to be adapted for all.

Let’s take a look at how the Singaporean system differs from the Scandinavian model.

High income tax versus low income tax

Denmark’s progressive income tax rate peaks at more than 60%, allowing the country to fund public policies such as free healthcare and education. The government also provides supplementary pension funds to retired individuals — whereas in Singapore you get none of those benefits, in return for a lower tax rate.

In Singapore, our income tax progress upwards according to an individual’s total income:

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Of course, this doesn’t include other forms of consumption taxes, which come in different forms in both countries.

Retirement schemes

Both Denmark and Singapore decide when an individual can retire through various age milestones.

For instance, in Singapore, the Central Provision Fund (CPF) only allows individuals to withdraw their retirement funds in stages beginning at the age of 55.

When you turn 55, a Retirement Account will be created for you using savings from your Special and Ordinary Accounts to form your retirement sum.

On the other hand, in Denmark, the retirement age at which citizens are able to receive a pension which changes with the country’s life expectancy.

The difference is, Denmark have a three-pronged approach to retirement funds. They are provided by the government, employers and the retiree’s own contributions, whereas Singapore focuses on the last two.

Although there are significant challenges in designing a policy system to fit the two societies, the Danish Prime Minister did not dismiss the fact that some policies in Singapore have been adopted from the Scandinavian Model.

Singaporean policies which are similar to Denmark’s

According to Mr Rasmussen, happiness is defined as confidence in one’s skills that the one could depend on despite economic turmoil.

That’s deep, considering how I define my happiness as donuts and nasi lemak.

Jokes aside however, Denmark ensures that citizens are equipped with the right proficiencies to stay relevant with a constantly changing job market. This keeps them employed.

Denmark has also recently allocated S$500 million to lifelong learning developments. Sound familiar?

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In terms of foreign policy, as small countries, both Singapore and Denmark adopt a stand that protects their own interest while being able to stand out in the global political scene as PM Lee suggested at the G20 Leaders Summit:

I think if we don’t stand up and be counted, you cannot lie low and hope that nobody will notice you. And I think that’s how Singapore must conduct our foreign policy.

Similarly, Mr Rasmussen emphasised that smaller countries must be able to step forward and raise concerns.

Small countries (such) as Denmark and Singapore have to step out and speak loud. We have to speak out for free trade.

The Scandinavian Model and the happy Danes

Despite having one of the highest tax rates in the world at 60.2%, the Scandinavian Model allows Denmark to maintain its place as one of the world’s richest and happiest countries.

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Denmark’s prosperity is envied across the world especially since it’s a small country with a population size comparable to that of Singapore. Any tax payer will be as envious towards Denmark’s free healthcare and education policies.

Also, Prime Minister Lars Løkke Rasmussen defined happiness as the “feeling trust of your own skills and not fearing the future”. This statement comes from a country that is constantly restructuring the economy in order to stay relevant in the global economic scene.

Denmark is not a short on foreign talent either. Out of the 100,000 new jobs created by PM Rasmussen’s administration, half of them were taken up by foreigners.

Interestingly, that sounds a lot like Singapore’s situation.

Yet, somehow, we are still one of the unhappiest in the region. *shrugs*

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Working for the Singaporean population

It’s fascinating how the Danes are much happier than Singaporeans despite having to fork out a much bigger percentage of their income.

Furthermore, with a subjective retirement age, they have to work longer too.

Singapore’s goal of steering itself towards achieving policies which are highly regarded like the Scandinavian Model, it is clearly not working out.

As Mr Rasmussen suggests, Singapore can’t just “copy-paste” the model. We need to start thinking of the best way to meet the needs of the diverse population.

Feature image via Facebook