Change, but with caution

SINGAPORE - The major policy shifts announced in the National Day Rally are to help citizens deal with the widening income gap and stagnating middle class - outcomes of the forces of technology and globalisation, and domestic social stresses.

And even as Prime Minister Lee Hsien Loong unveiled changes to build a fairer society, he also urged prudence, stressing that these should not lead to abuse of benefits and erosion of self-reliance. "Let me sound a word of caution. All this is not without risk," he said.

Other countries offer lessons, and Singapore has to tread carefully and beware the pitfalls such as high debt and unemployment.

The United States, for example, has the world's highest health- care spending but with outcomes worse than in many developed countries, including Singapore.

In Finland, workers receive comprehensive protection but youth unemployment is at 20 per cent despite a good economy and education system.

Therefore, said Mr Lee, while the Government will do more for low-income families, this cannot undermine self-reliance.

While it will increase health-care spending, that cannot lead to over-consumption and unnecessary treatments.

And while the education system is being made more open and broader, academic standards and rigour cannot be compromised.

The changes are aimed at improving the lives of Singaporeans, but all good things have to be paid for, he reminded Singaporeans.

The Government can still afford to fund these measures from existing revenues, but in the longer term they will become more expensive, especially health care.

Therefore, Singaporeans must be prepared to pay for them whether through higher taxes or a cut in spending in other areas.

"We cannot saddle our children's generation with debt so as to pay for our consumption. And I think Singaporeans know this," he said. "We must pass on to our children a better Singapore than the one we inherited. We owe it to them to do so, just as we owe what we have today to our founding generation."

Outlining why the Government is changing its approach, he said Singapore is at a turning point.

Domestically, it is facing stresses from an ageing population and declining social mobility, compounded by day-to-day problems such as rising cost of living.

The global landscape is also in the midst of rapid change and uncertainty. Technology is transforming lives, with three-dimensional printing of medical devices, but also robots that are replacing skilled, professional jobs. Competition is also intensifying with China and India adding 10 million graduates each year.

Those with exceptional skills which are globally in demand, be it in finance, sports or culture, will do very well.

Mr Lee cited Real Madrid football star Cristiano Ronaldo, who visited Crest Secondary School last month and has 60 million Facebook followers, as an example. He quipped that he felt like a "little kucing kurap, looking at this mega star". (Kucing kurap is a Malay term for small fry.)

However, the many who are not as talented or lucky must work a lot harder, and may not earn more even as they experience less job security than before.

"So we are seeing competition and we are seeing income inequality rising, the top zooming away, middle class stagnating," he said.

But he had this assurance: "I understand your concerns. I promise you, you will not be facing these challenges alone, because we are all in this together."

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