Monday, December 4, 2006
PM addresses poor-rich, citizen-foreigner divides; announces Workfare scheme as 4th pillar
Tor Ching Li
chingli@mediacorp.com.sg
For most Singaporeans, globalization has been the story of two divides: That between the poor and the better-off, and that between citizen and foreigner.
But even as the widening income gap has drawn concerned calls for a bridge to help the lower income keep up, the other dichotomy has drawn rumbles of an opposite sort — a plea for greater differentiation in benefits for citizens and for foreigners.
Yesterday, People’s Action Party (PAP) secretary-general and Prime Minister Lee Hsien Loong addressed both divides, assuring some 1,000 party cadres of more systematic protection for lower-income Singaporeans and that citizens would always come first.
In view of the first, he announced, Workfare would become a permanent part of Singapore’s social safety net — as its fourth pillar, in addition to the existing three of the Central Provident Fund, the 3Ms of healthcare (Medisave, Medifund and Medishield) and the Housing and Development Board home ownership scheme.
“It’s a big move. We thought about it for a long time before doing it… We have done it once with the Workfare Bonus in the Progress Package. Now we will do it regularly,” he said, speaking at the PAP party conference. The Workfare Bonus aims to get lower income workers to stay employed, with a matching reward from the Government for every dollar earned.
For a start, a three-year Workfare scheme will be announced at next February’s Budget Debates. After that it will be reviewed and adjustments made, but what’s for sure is that Workfare will be here to stay.
The scheme is one of the reasons for raising the goods and services tax (GST) from 5 per cent to 7 per cent, which is estimated to bring in some $1.2 billion more in revenue annually. This will be used for higher healthcare spending, to prepare for an ageing population, to invest in the future – and saved for future “unknown unknowns”, said Mr Lee.
And while the GST offset package to be unveiled next February would be weighted towards lower-end earners, “sandwiched” middle income Singaporeans would not be left out.
“Don’t worry, we have not forgotten you, we will have something for the middle income in the package,” said Mr Lee, adding that older citizens would also benefit.
The emphasis was on “citizens” — because only they will get to enjoy the GST offset package, just as the Progress Package and other asset sharing measures were exclusively for Singaporeans.
Mr Lee said: “When we talk about immigration and foreign talent and workers, our purpose is to do what is best for Singapore as a whole. Citizens will always come first, we have to treat them the best.”
That means clear distinctions in the treatment of citizens, permanent residents (PRs) and other non-citizens have to be made. PRs now enjoy the same subsidies as Singaporeans for education and healthcare. Even foreign workers and work permit holders can get subsidized healthcare treatment.
Said Mr Lee: “PRs should pay more than Singaporeans, but less than other foreigners so there is a distinction between Singaporeans and PRs. It’s a reminder that they are not the same as citizens.”
Foreign workers will be made to pay the full cost of healthcare, with employers responsible for buying health insurance for them.
Non-citizens will be charged more for education, but not so much more that foreign students will be deterred from coming.
Mr Lee said that the relevant ministries will work on these measures over the next few months.
Political observers and MPs alike welcomed the announcements. Said Dr Terence Chong, a fellow at the Institute of Southeast Asian Studies: “The PAP is responding to a growing sentiment on the ground that Singaporeans are often treated like second-class citizens. It’s refreshing to hear about citizens’ rights rather than their responsibilities and obligations.”
Mdm Halimah Yacob (MP for Jurong GRC) said that it was “high time” such a clear distinction was made: “There are a large number of foreigners and PRs who never converted to Singaporeans who seem to be getting the best of both worlds. While we cannot force them to make a decision, it is only fair for Singaporeans to enjoy certain benefits along with their obligations.”
Adding a fourth dimension to the social safety net was “a polar shift”, she felt. “It recognizes that even people with jobs may need help because they are no longer earning enough to keep up with the forces of globalization.”
But Dr Chong did not think Workfare by itself was enough to get Singaporeans working, such as those older workers who cannot find employment. “The success of Workfare will also hinge on the success of efforts to retrain workers and redesign jobs,” he said.
Mr Lee, who also spoke in Mandarin and Malay yesterday, touched as well on the PAP’s fundamentals of racial harmony, meritocracy, enterprise and inclusiveness.
While acknowledging that raising the GST was not a popular move, Mr Lee said it was the “right thing to do” and that the PAP government did not go for “instant popularity”.
He was confident the policies would “bear fruit over the next few years”, calling on Singaporeans to judge the party by its performance in the economy, whether jobs and life were better and society’s state of harmony.
“By the next election we will be ready to present our report card to Singaporeans. This is the way that the PAP does it – better to be upfront with Singaporeans, to take the medicine first, and if we have sweets, to enjoy that later,” he said.
Citizens versus residents
Education: Currently enjoying the same subsidies, non-citizens will have to pay more school fees – albeit not so much as to deter them from coming here
Healthcare: Currently enjoying the same subsidies, permanent residents will have to pay more than Singaporeans but less than other foreigners.
Foreign workers will have to pay the full cost, instead of subsidized treatment costs; onus is on employers to buy health insurance for foreign workers.
