The local Chinese evening daily, Lianhe Wanbao (联合晚报), emailed me earlier this week to ask for my comments on Singapore’s social welfare system. This was with reference to the article in The Economist (“The stingy nanny”), which I blogged about on 15 February. The Wanbao article appeared this evening.
The following are my responses to the reporter’s questions:
Do you think our welfare system is doing enough to help the needy?
No, I do not think our welfare system is doing enough to help the needy. Our current welfare system is designed to help only those who are in extremely dire straits and have no where else to turn to except death. However it misses out on helping many needy people who have some assets, and a few relatives, but are completely cash-strapped and are in an equally desperate situation.
Also, do you think it is an often heard criticism that our welfare system is stingy to the poor?
Our welfare system is stingy to the poor. The numbers speak for themselves. In FY2009, MCYS was allocated only $183.6 million (or 0.4%) out of an entire government budget of $43.4 billion to “assist vulnerable groups”, much of which went to fund self-help groups, and run programmes like active ageing projects, rather than placing cash in the hands of the needy. (Correction: The FY2009 projected government expenditure was $43.6 billion.) There are only 3,000 who qualify for Public Assistance of $360 a month. Is it really possible that there are only 3,000 people in Singapore with no sources of income?
This sort of budget allocation is suitable for a poor, developing country with an empty Treasury, but we are long past that stage. We are now an extremely wealthy, developed nation with enormous reserves and huge annual budget surpluses–and also very high income inequality. For example, the projected Net Investment Returns (from investing our reserves) were $7.7 billion in FY2009. This is many times more than all the direct social welfare provided by the government. The government can definitely afford to be much more generous, even without raising income taxes.
If so, what do you think is the reason?
It is because of the blindly anti-welfare ideology of the PAP government. They have convinced themselves that welfare will lead to laziness. However this not necessarily so. A well-designed welfare system will provide citizens with peace of mind and an assurance of a decent safety net if they fall (e.g., lose their job), while still focusing on getting those who are able to work back into the workforce.
Here is the article (click to enlarge):