Govt to keep boosting social safety net: PM

Dear PM Lee,

I refer to the 3 Dec 2010 Straits Times report of your remarks on Singapore’s social safety net.

You said America is more self-reliant and therefore more dynamic and competitive whereas Europe has more welfare but less growth and has been living beyond its means. But according to the 2010 Global Competitiveness Index, the two most competitive economies in the world are the European countries of Switzerland and Sweden. Both are deemed to be more competitive than America. Germany, Finland, the Netherlands, Denmark and the UK have competitiveness scores very close to that of America’s too. So many European countries have similar or better competitiveness scores compared to America, there is no reason to believe that America is significantly more competitive.

Also, the annualised growth rates of Europe and America over the last thirty years are similar too. There were times when Europe outgrew America, and times when America outgrew Europe. But there is no evidence that American growth has been significantly higher than those of Europe’s. There is no truth to the saying that welfare has slowed Europe or caused it to be less competitive than America.

The global financial crisis wasn’t just a judgement day for Europe, it was also a judgement day for the rest of the world as well which despite having witnessed the bursting of Japan’s property bubble twenty years ago as well as those of Thailand’s during the 1997 Asian Financial Crisis, never learnt their lesson and continued to allow property prices to shoot up without concern. Singapore too has been guilty of the same mistake.

You said we in Asia are different from Europe because we depend on talent, energies and drive of our people as though Europe doesn’t. SAP, Nokia, Ikea, Bayer, Volkswagen are all products of European talent, energies and drive.

Contrary to what you have said, home ownership does not necessarily help people to save for old age. The high price people have to pay for their houses means they can only save less for old age.

You said social security includes Medisave, Medishield and our flat. But these are paid for by ourselves. They belong to us, not to society. They therefore cannot be considered social security. Because if you consider that which belong to us as part of social security, then you might as well consider our bank savings as social security.


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