SINGAPORE: Singapore’s social safety nets must adapt to the “major changes” in the economy and labour market so as to keep inequality in check, said Deputy Prime Minister Heng Swee Keat on Monday (Aug 31) in Parliament.
With economic changes picking up pace and job disruptions due to technology adoption becoming more common, he noted that Singapore will have to take “an integrated view” of its economic and social policies.
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Having a job remains the best form of welfare for Singaporeans, he told the House, adding that the Government will continue to invest in its people and match them to new opportunities.
“This way, we will keep social mobility alive,” he said in a speech delivered during the debate on the President’s Address.
"At the same time, with major changes in the economy and labour market, we will need to adapt our social safety nets and keep inequality in check.”
He added: “More workers will fall on hard times, and we need to enable them to adjust and bounce back through this crisis and beyond."
This includes tweaking support for people who are self-employed as more Singaporeans take part in the “gig economy” either on a part-time or full-time basis. More also has to be done to uplift lower wage workers and enable older workers to continue working if they wish to, he said.
GOVERNMENT TO KEEP AN OPEN MIND
Mr Heng, who is also Finance Minister and Coordinating Minister for Economic Policies, said various ideas on adapting the country’s social safety net have been proposed, such as a minimum wage, universal basic income and unemployment insurance.
“The Government will keep an open mind to all these ideas. But we must also recognise that there are no magic bullets,” he said, noting that each of these ideas has its merits and unintended effects.
“We have to consider the trade-offs and be clear about what works for our context and our times.”
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For instance, demands on Singapore’s social safety nets are increasing at a time when its revenue base is growing more slowly and amid sharper competition for tax revenue across countries, he said.
“So I must caution against looking for what may appear to be ‘costless solutions’ – somehow, someone else will have to pay for these schemes. There are trade-offs,” Mr Heng elaborated.
“If we want higher social spending, taxes will have to go up. Or it will mean spending more at the expense of future generations, like what many countries have done by raising debt.”
Social safety nets must also be strengthened in a way that “reinforces, and not undermine, an individual’s efforts”, he added.
Mr Heng said a social safety net “cannot become a set of shackles” that holds down those who started with less or “create dependency”.
ADAPTING THE ECONOMY
In his speech, Mr Heng also outlined several ways to strengthen the Singapore economy.
One such strategy, he said, is to find new ways “to be a vital node, with rich and deep interconnections with the rest of the world”.
Mr Heng said Singapore's size and its lack of a domestic hinterland means there is no buffer against external shocks. Therefore the country must forge new connections such as digital economy agreements, and deepen its linkages with Asian markets to ride on the region’s potential, he said.
Singapore also has to “remain open to investment and talent from around the world,” said Mr Heng.
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He acknowledged the anxiety among Singaporeans about their livelihoods in an economic downturn, and added that the Government’s “economic strategies must serve the interests of Singaporeans”.
“The foreign investments we attract must create meaningful jobs for our people and strengthen our corporate ecosystem. Singaporeans must receive fair consideration at the workplace,” he added.
Mr Heng cited the latest adjustments to the qualifying salaries of foreigners on Employment Passes and S Passes as an example of how the Government has tweaked foreign manpower policies “to ensure that Singaporeans’ interests are upheld”.
But he cautioned against Singapore turning inwards.
“We cannot close ourselves to the world, or make foreigners unwelcome in our society.”
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Mr Heng also talked about how Singapore can take “an even more integrated and coordinated approach to economic transformation” by building on its existing tripartite partnership to include more stakeholders, such as education and research institutions, as well as community groups.
The country will also have to redouble its efforts to develop people to their fullest potential, by promoting lifelong learning as well as exploring other new possibilities.
More work will also have to be done when it comes to finding new bright spots amid the economic disruption.
He referred to the Emerging Stronger Taskforce, which was set up four months ago for this purpose and has made “good progress”.
Since then, the task force has commissioned seven industry-led coalitions, dubbed the Alliances for Action, and are exploring ideas in areas such as environmental sustainability, smart commerce, supply chain digitalisation and the use of robotics.
“These can create new growth markets for our businesses and good jobs for Singaporeans,” he said.
In a speech that also touched on how Singapore must stay united amid these challenges, Mr Heng said the country will need to adapt while staying true to its values.
"Change will leave us behind if we stand still. That we must adapt is a given," he told the House.
"What will define this term of Government is how we will adapt, that will build a better life for our people. Even as we keep pace with change, we must stay true to the values that have enabled us to progress all these years."