Signs point to landmark National Day Rally

SINGAPORE - Anyone who has followed recent Cabinet statements should expect substantial announcements in the Prime Minister's National Day Rally on Sunday night.

In his National Day message, Mr Lee Hsien Loong said the Government will play a bigger role to build a fair and just society. "We will do more to enable every Singaporean to succeed, through education and lifelong learning. We will keep avenues to rise wide open to all. We will help those from families with less get off to a good start in life, beginning from pre-school," he said.

"We will tackle the cost of living, for example health-care costs, especially for the elderly. We will foster a more equal society, by helping every family afford their own HDB flat, and giving low-income workers a better deal through Workfare. In Singapore, everyone will always have a stake in this country, and ample chances to make good in life."

Singapore, the Prime Minister added, had to "strike a new balance between the roles of the individual, the community and the state".

He will likely elaborate on Sunday night, but it sounds very much like the Government is ready to move decisively to address looming storm fronts.

Of course, what it touts as significant shifts may still fail to impress some sections. Effects of good policies typically take time to be felt on the ground, and programmes that cost hundreds of millions of dollars at the macro level can seem paltry when they trickle down to households.

This is why the People's Action Party (PAP) has always had an allergy to over-promising. When it advertises its goodies, it quickly magnifies the fine print to moderate expectations. We saw it again last week, when Mr Heng Swee Keat, overseeing the Our Singapore Conversation consultation process, sought to clarify that any ensuing changes had to fit a strategic long-term vision. Translation: We are not populist.

All these caveats aside, though, it is clear that the Government has for some years been grappling with fundamental challenges shared with other economically successful countries.

At its core, it is about an open economy that is extremely good at riding the forces of globalisation and rewarding those who are plugged in, but less capable of pulling along average and lower- income Singaporeans.

The gap has been growing, and in some sectors, particularly housing, it has become untenable. More worryingly, as the rich pull away from the rest, their willingness to accept redistribution may wane, as studies elsewhere have shown might happen. The Government may have come around to recognising that it is better to intervene sooner rather than later.

In recent months, National Development Minister Khaw Boon Wan has said that he wants to lower the prices of flats in non-mature estates to four times applicants' annual household median income, compared with the current 5.5 times. We can expect the Prime Minister to flesh out the promise of making housing affordable, with more grants perhaps to more households.

As for health care, there is no running away from the fact that an ageing society will impose strains on the system. Watch out for bold initiatives to relieve the anxieties over rising medical costs while preserving the essence of personal responsibility.

The Government has also indicated that there will be changes in the school system to make education less stressful and to create as many pathways to success as possible. Deputy Prime Minister Tharman Shanmugaratnam has envisioned a continuous meritocracy with diverse definitions of success.

No matter what the Prime Minister and other ministers say, some listeners will be sceptical. This is a natural outcome of the polarised politics that Mr Lee also mentioned in passing in his National Day message. Critics will feel that the PAP knows it cannot just ignore Singaporeans' woes - not after the ruling party's setback in the 2011 General Election and this year's Punggol East by-election - but in the end it is all just lip service.

There is no doubt that recent ballots were a wake-up call, as acknowledged by the PAP's own ministers. But to be fair to the party, it started addressing the income gap before the 2011 GE. The most important departure from PAP orthodoxy to date - the Workfare income support scheme - was launched in 2007.

If the PAP has been too conservative, it is not because it is in denial, but because it has been wrestling with the challenge of developing solutions that are more than just short-term palliatives. It remains convinced that it must come up with a sustainable long-term model that does not compromise Singapore's core strengths as an open economy that rewards enterprise and effort.

But there are now signs that the Government is ready to do more to shed what some Singaporean economists have called its "market fundamentalism" - an unjustified faith in the untrammelled forces of supply and demand.

When this newspaper interviewed Mr Tharman in April, he spoke of such a shift, saying that the "centre of gravity" in Cabinet had moved "left-of-centre" compared with when he joined politics 11 years ago.

This would be in keeping with new thinking in economics, that intervening to moderate inequality isn't a soft-headed option but makes hardnosed economic sense.

In his book The Price Of Inequality, Nobel Prize-winning economist Joseph Stiglitz talks about why capitalist societies need to pay attention to those who are struggling to get by. Investing more through education, technology and infrastructure and providing more security to ordinary citizens will lead to a more efficient and dynamic economy, he argues. The lack of opportunities for those at the bottom means their potential will go unfulfilled and they will never get a fair chance to break the cycle.

Professor Stiglitz is talking about the United States, and Singapore's situation is nowhere near as extreme, but the same logic applies. In his 10-minute National Day message, a part of which I quoted earlier, PM Lee said the Government will try to "foster a more equal society". On Sunday night, he will have more than two hours to elaborate, and to persuade Singaporeans that his Government's vision is one that they can believe in. I am looking forward to it.

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