Tharman: Govt will fund, sustain social policies

Tharman: Govt will fund, sustain social policies

SINGAPORE - Deputy Prime Minister Tharman Shanmugaratnam has set out just how the Government plans to pay for and sustain a broader, stronger social safety net, and its reasons for moving in this direction.

"As we intervene boldly, we will ensure that our policies can be funded and sustained well into our children's future," he said.

He was speaking at an Academy of Medicine event just five days after a National Day Rally that Prime Minister Lee Hsien Loong said marked a strategic shift towards greater state support for the vulnerable in areas such as housing and health care.

DPM Tharman, who is also the Finance Minister, said Singapore is at a good starting point as compared to mature economies in the West. They built up large debts in their rapid growth years and when their populations were young, while Singapore did the opposite.

They will now have to take from their budgets each year - at least 2 per cent of gross domestic product (GDP) - to service national debts, while Singapore is able to get 2 per cent of GDP from the income on its national reserves for its social and economic priorities, he said.

To ensure that its policies for a fair society are good not just for two or three electoral terms but for generations ahead, Singapore will have to keep in mind five priorities, Mr Tharman said, elaborating on each in turn.

The first is to keep government subsidies targeted at those who most need them, rather than commit to benefits for all. Universal benefits are "wasteful and inequitable", and hard to take away once given, he said.

The second is to design redistribution policies in a way that spur self-reliance and individual responsibility. This is to avoid the erosion of the work ethic and personal effort that has led to high youth unemployment rates, even in Europe's successful economies.

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