Govt help must spur self-reliance, says Tharman

Govt help must spur self-reliance, says Tharman

DEPUTY Prime Minister Tharman Shanmugaratnam on Monday placed personal responsibility front and centre in the Government's approach to building an inclusive society.

He said the Government will continue to tilt its policies in favour of the lower-income groups and expand support for the middle-income. As it does so, the question to ask is how to do so in a way that preserves the social culture and norms that enable Singapore to be a fair society, without reducing its vim and energy.

He was delivering the annual S. Rajaratnam Lecture organised by the Ministry of Foreign Affairs.

Many developed countries face an uphill challenge in keeping their societies inclusive, Mr Tharman said. While taxes and transfers have mitigated inequality, they have, with few exceptions, failed to restart social mobility.

The biggest looming challenge is a crisis of intergenerational equity as pensions and health-care financing reforms have not kept pace with longer life spans.

He outlined Singapore's approach: "We must do more to help the poor and sustain mobility in each new generation, but do it in a way that reinforces individual effort and responsibility for the family. This paradox of active government support for self-reliance has to run through all our social policies."

He emphasised that Singapore was facing its inclusive growth challenge from a position of strength.

Unlike many other advanced countries, it had not burdened its next generation with crippling debt due to promised pension payments premised on unrealistic investment returns, he said.

The bulk of its poor also own their own homes, which sharply diminishes social inequity. And through the Government's "kueh lapis" of social assistance schemes, a typical low-income couple in the bottom decile would receive benefits that would help them more than double their lifetime earnings, he noted.

Distilling lessons from Western and Northern European welfare systems, he pointed to how policies can shape and transform a country's social culture.

Over the decades, for example, the traditional industriousness of the Swedes has morphed into high rates of sick leave and disability benefits, he noted. Sweden is now grappling with a youth unemployment rate of 24 per cent.

"Too much dependence on the state eventually saps the energy of society," he said.

But unfettered free-market capitalism also "breeds its own social ethos, where individuals look out for themselves". This, over time, saps societies' morale, he said.

Singapore's way must be a balance of the two extremes.

"As we step up our social policies, our approach must be to encourage a compact between personal and collective responsibility, where each reinforces the other, rather than a zero-sum game," he told the audience of over 600 diplomats, government officials, academics and students.

Singapore also needs to grow risk-taking and innovation in its social culture, as these are qualities the global economy rewards. And it must avoid a political culture of "short-term calculus, of extracting political gains for today, and leaving someone else to solve the problem further down the road".

"We have to keep the popular narrative on the long term, even as we take care of today's generation," he said.

rchang@sph.com.sg


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