<above pic: % of GDP in social expenditures in OECD states, 2013>
Ms Li Dan Yue has proposed that a welfare state may be feasible in Singapore ("Merits of Western-style welfare system"; Tuesday).
While I agree that more help should be given to the less fortunate, we must tread prudently when it comes to implementing universal welfare. In fact, many Nordic countries have begun to move away from this system.
We must recognise that Singapore is culturally different from the Nordic states. While it may be true that people in the West work for fulfilment rather than for monetary reasons, this is not the case in Asia. It is easy to imagine that workers might be tempted to stop working if they receive welfare benefits, as there are few non-monetary reasons for them to stay in their jobs.
Universal welfare necessitates a high level of government spending.
With a growing and ageing population in Singapore, it is natural that government spending on health care will increase. In turn, the State may have to spend less on other important areas such as education and supporting small and medium-sized enterprises.
It is difficult to sustain a stable economy in this case.
Moreover, the State may have to incur debt in order to sustain welfarism. This is extremely risky as not only does this cause foreign investors to lose confidence, but it also results in a never-ending cycle of borrowing and spending in order to get out of debt. Many European countries are struggling with this problem.
One of the biggest drawbacks of welfarism is that it is almost intractable.
Once welfare benefits are offered, they are almost impossible to remove. Doing so would be an act of political suicide. Implementing universal welfare results in states becoming economically inflexible, as they will be unwilling to take unpopular but necessary measures for economic recovery.
While I am all for continuing to find new and more comprehensive ways to cover the health-care needs of Singaporeans, we cannot apply wholesale the Western model without forfeiting the strong economic foundations we have built up over the years.
Even as we continue to "level up" those in the lower-income brackets, we must also be financially prudent.
Ng Qi Siang
*Article first appeared on ST Forums (21 March)