Wednesday 4 December 2013

Govt help must spur self-reliance, says Tharman

Compact between personal and collective responsibility
By Rachel Chang, The Straits Times, 3 Dec 2013

DEPUTY Prime Minister Tharman Shanmugaratnam yesterday 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.


We are finding a new normal where there are more voices and the Government is listening more. It is a new normal where people will participate and lead more, and not just in the political sphere... Our starting point is not a bad point. It is one of popular support for what the Government thinks is important for Singapore. Every mass survey shows that. But there are more voices, proposing alternatives. These can sometimes disagree with the Government, and I think this is a process of give and take, and we are going to end up in a better place if we continue listening, and if the voices are mature, responsible and translate into concrete actions.

– Mr Tharman, on whether growing politicisation of Singapore society will hamper the Government’s agenda

To boost social mobility, 'focus on how help is given'
By Charissa Yong, The Straits Times, 3 Dec 2013

JUST giving disadvantaged families more does not boost social mobility, Deputy Prime Minister Tharman Shanmugaratnam said yesterday.

"The most important question is not how much we redistribute, but how we do so," he said, citing studies done by Nobel laureate and economist James Heckman.

DPM Tharman also referred to studies which showed that traditional ways of redistributing income - like giving poorer families tax credits - have only a small impact on mobility.

Instead, what happens at home, in school and the community shapes a child's aspirations, confidence and support, he stressed.

Studies have shown that upward mobility is higher for the poor in areas with better schools and preschools, for example. This is why it is vital to intervene earlier in children's lives and broaden the education system to focus less on grades, Mr Tharman said at the annual S. Rajaratnam Lecture series.

He noted that the Government is investing in better quality pre-schooling at affordable rates, and in early detection of those with learning difficulties.

It is moving away from testing pupils too much in their early primary school years, which favours those who begin with a head start. The PSLE system is also changing to be less finely differentiated.

These are all to "reduce the gaps in the starting points between children from poorer and better-off backgrounds", the minister said.

Research has also shown that it does not make sense for every child to get the same kind of education, he noted, as this can lead to non-egalitarian outcomes. There should be differentiated pathways to help students discover their strengths.

Investments in continuous education also provide "bridges and ladders" for working adults, so that someone's grades in his youth "do not settle things for life".

Everyone should also have access to quality living in neighbourhoods and public spaces, he added, to avoid having social problems being reinforced in disadvantaged neighbourhoods.

Why it pays to ponder social choices
Editorial, The Straits Times, 6 Dec 2013

THE adage that the means we use are ends in the making applies to social policy as well. The European welfare state, and its North American variants, rightly sought to protect the industrious worker from the caprice of capitalism. But what began as a modest means of tempering the excesses of the market economy became an end - a popular belief in a culture of entitlement - that now influences the psychology of work itself.

This has arrived at a point where many of those societies are finding it difficult to compete with economies fired by a vibrant work ethic and a sense of personal responsibility. Welfare dependency obscures the reality that, even in prosperous societies, politics is often the politics of scarcity. That is, trade-offs have to be made between competing needs because no set of wants can be satisfied entirely without affecting the remit of other equally legitimate needs. This harsh truth applies to all countries, but it has special relevance to Singapore, a city-state whose near-absence of natural resources places a premium on fiscal prudence.

Earlier this week, Deputy Prime Minister Tharman Shanmugaratnam outlined some of the complexities of fashioning a social policy for Singapore that would be equitable without becoming egalitarian to the extent that it saps self-reliance and community initiative. Among the key areas where Singapore would have to strike a balance are the twin goals of self-reliance and collective responsibility; ensuring that taxes protect inter-generational equity; and the desire for a strong civic society that can co-exist with the selective need for an activist state.

The fundamental point is that social policy can have an unintended effect on social culture by creating attitudes and manufacturing demands that cannot be reversed easily in a democracy. Citizens need to ponder this point carefully. No matter how far the so-called new normal expands the political space for welfarist demands on the state, Singaporeans must realise that those who have been there and done that - among them Sweden, Denmark and Britain - are retracing their steps.

The dour reality at the end of the day is that wealth must be created before it can be redistributed. Also, the redistribution will be self-defeating if it destroys the desire to strive hard. The broadening of the meritocratic base that is in progress is necessary, but Singapore cannot afford to forgo its tested record of depending on merit to allocate rewards and create an economically vibrant society in which the talented have a stake. Social culture must continue to reflect the inescapable realities of human nature as it really is, not as it hypothetically could, or should, be.

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