The Government is embarking on a new phase of governance for Singapore, but even as it actively redistributes to combat inequality, it is keeping its "eyes wide open" for the pitfalls of welfarism, said Deputy Prime Minister Tharman Shanmugaratnam on Friday.
"Even as we intervene boldly, we will ensure that our policies can be funded and sustained well into our children's future," he said in his oration after he was made an honorary fellow of the Academy of Medicine.
Speaking a week after Prime Minister Lee Hsien Loong announced a "strategic shift" at the National Day Rally, Mr Tharman laid out five priorities to keep in mind "so that we ensure that policies for a fair society are not just for two or three electoral terms, but for generations ahead".
First, the Government should continue to target subsidies at those who need them the most, instead of committing to universal benefits which are "not just wasteful, but inequitable", he said.
Two, spending and subsidies should be designed to reinforce individual effort and responsibility for the family, he said.
Third, the Government must support community initiatives for a fair and just society with tax incentives and grants. Welfare states, he said, have created a paradox where the active state "has freed people from the social and moral bonds of family and local community".
Fourth, Singapore must maintain a progressive system of taxes and benefits. "It is in fact more progressive than meets the eye," said Mr Tharman, noting, for instance, that Workfare gives older or lower-income workers a 20 to 30 per cent credit - or negative income tax - from the Government.
Lastly, said Mr Tharman, a fair society cannot be conceived of purely in wage, income or redistributional terms. It is also about having access to quality living in public spaces and having the ability and chance to keep learning for the inherent satisfaction of it.
"It is about developing a spirit of fellowship and togetherness as our young grow up in schools," said Mr Tharman, adding that this includes a culture that treats all workers with respect and Singaporeans pursuing causes which they feel lead to a better society.
Delving into examples from other countries and economic models, Mr Tharman noted that the problem of higher inequality and slowing incomes is testing social systems all over the world, leading to a search for new solutions.
In Singapore, he said, the rise in inequality is not only due to globalisation. It is also due to the rapid transformation of educational standards "not over several generations as in many countries, but over a single generation", resulting in a workforce which has both lower and highly educated cohorts at the same time.
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