Back-and-forth on the mechanics of opt-in and opt-out

Back-and-forth on the mechanics of opt-in and opt-out
Casino at Resorts World Sentosa.

In one of the few lively moments of the first Parliament sitting of 2015 yesterday, Minister for Social and Family Development Chan Chun Sing and Ms Denise Phua crossed swords - or, more accurately, wires - over the concepts of "opting in" and "opting out".

After Mr Chan fielded a question from Mr Seah Kian Peng (Marine Parade GRC) about making it easier for Singaporeans to apply for self-exclusion from the casinos here, Ms Phua rose to speak.

With her trademark unwavering opposition to the casinos, she asked the minister to consider a national "opt-in" system of entry instead.

Rather than have individuals or groups volunteer to be barred from casinos, as is the case now, all Singaporeans should be prohibited from entry by default, she suggested.

Those who want to go to the casinos can then apply to "opt in".

After some back-and-forth, Mr Chan eventually said he would think about it.

But he expressed confusion at the concept, given that Singapore citizens and permanent residents (PRs) must already pay $100 to enter the casinos - which could be considered an act of "opting in".

Gambling aside, the mechanics of "opt-in" and "opt-out" systems - key aspects of public-policy design premised on the quirks of human nature - surfaced in two important pieces of legislation that came before the House yesterday.

One was the MediShield Life Scheme Bill, which will enshrine in law the proposed universal health insurance programme.

Tabled yesterday, it assumes that all citizens and PRs will implicitly consent to having their health and income records accessed by the authorities.

This is to ensure the accurate calculation of premiums and subsidies and the honest disclosure of medical conditions.

While people can opt out of this data deep-dive, inertia will almost certainly ensure that most will not.

Take organ donation as an example. Behavioural economist Richard Thaler has noted that in Germany, which uses an opt-in system, only 12 per cent of people agree to donate their organs after death, whereas in Austria's opt-out system, 99 per cent give their consent.

Thus while deciding to make a programme "opt-in" or "opt-out" sounds like a small policy detail, the way people react to default choices means it can add up to a huge difference in participation rates for a scheme.

For MediShield Life, near-universal participation is key so that the healthy and young can help subsidise the old and sick. This could explain the wide-ranging powers sought by the Government, and the decision to design parts of the scheme as "opt-out".

MPs seem largely supportive, although the House will debate the Bill in substance only at a later date.

The second Bill to probe the dichotomy of opting in and opting out was the Industrial Relations (Amendment) Bill, which the House spent time debating yesterday.

The changes, which Parliament approved after the debate, are designed to bring more professionals, executives and managers (PMEs) into the fold of labour unions.

Previously, such PMEs could form their own unions or ask rank-and-file unions to represent them, as individuals, in certain areas.

With the changes to the Industrial Relations Act, they can be represented, en masse, by existing rank-and-file unions in their industries. The only executives who remain excluded will be senior management who make pay and hiring decisions.

The nine MPs who rose to speak lauded the changes, saying unions cannot continue to exclude PMEs, who will make up two-thirds of the workforce here by 2030.

But with PMEs having previously been largely in the shadows of industrial relations, the question is whether they will now, given the opportunity, opt in.

Their decision may be crucial to the continuing role that labour unions have.

While union membership has been rising, NTUC still represents a minority of Singapore's overall workforce.

And recent moves, such as a proposal by the Manpower Ministry to set up a tribunal that can resolve pay disputes for all workers, unionised or not, raise the question of what relevance it can garner with a new generation of Singaporean professionals.

As Nominated MP and unionist K. Karthikeyan said during the debate yesterday, the challenge is to change the mindset on the ground - from a default opt-out posture, long the status quo, into opt-in.

rchang@sph.com.sg


This article was first published on Jan 20, 2015.
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