SINGAPORE — Deputy Prime Minister Lawrence Wong outlined a plan on Tuesday (Sept 26) to deal with the twin challenges of inequality and mobility amid a more challenging environment. He pledged that the Government will work to advance the well-being of the broad middle, while uplifting the lower-income and sustaining social mobility, especially for the disadvantaged.
At the same time, he stressed the need for collective action, especially by those who have done well, to build a fairer society.
Speaking at the Economic Society of Singapore Annual Dinner held at the Fairmont Hotel on Tuesday night, he said the Republic's efforts to build a more inclusive society must not be limited to monetary redistribution and government policies, but must also involve the community, such as through a stronger philanthropic culture.
Such efforts "must strengthen the culture of responsibility for one another, so that we all feel a sense of duty to each other and not just a right to the benefits of citizenship", he said to the audience of about 550 economists and other invited guests.
Wong, who is also Finance Minister, said in a 40-minute speech that the Government has been thinking hard about these issues of inequality and social mobility as part of the Forward Singapore exercise to refresh the nation's social compact.
Started in June 2022, it will conclude soon with a final report to be put out, said Wong as he previewed some of the report's recommendations.
On tackling inequality and social mobility, a key imperative will be to advance the well-being of the broad middle, said Wong who is the leader of the People's Action Party's fourth generation of political leaders.
This will be done by helping people secure jobs with good salaries, so that their real incomes and standard of living will rise over time.
Wong said the best way to achieve this is through a dynamic economy that continues to attract quality investments and scale up home-grown enterprises.
He noted that in the past decade, working at high-value firms have helped a large proportion of middle-income workers here grow their incomes at a faster pace, compared with those in major advanced economies like the United States and Finland.
That is why Singapore needs to double down on economic restructuring, though the churn will be painful and has to be carefully managed, he added.
The Government will do more to help workers adjust to the quicker pace of change — especially those in their 40s and 50s who are more vulnerable, pledged Wong.
There are plans to step up investments in adult training through a significantly strengthened SkillsFuture system and credit top-ups for mid-career workers, among other things. The revamped system will also be how laid-off workers will get unemployment support, he added.
The next priority is to make society more equal by uplifting those in the lower-income segments, he said.
Singapore's income inequality, as measured by the Gini coefficient, is on the lower end among advanced economies before taxes and transfers. It is about the same as in places like the US after taxes and transfers, while keeping the overall tax burden relatively low for most workers here, he added.
One segment the Government is focusing on is ITE graduates, and the growing wage gap between them and those from polytechnics and universities, said Wong.
He noted that Singapore has a higher occupational wage disparity between those engaged in "head" work, like managers and professionals, and those who engage in "hands" and "heart" work like technicians and service workers, compared to other advanced economies.
To reduce this gap, help will be given to ITE graduates to upgrade their skills over time. The authorities will also redesign jobs, raise productivity and build better progression pathways industry by industry, said Wong.
"We have made good progress in certain sectors like pre-school education and nursing, and we are looking at how we can do the same for other services and professional trades," he said.
But this cannot be done by the Government single-handedly, and employers and consumers will also have to do their part to uplift those "hand" and "heart" workers who keep society going, he added.
As the Government works to close these inequality gaps, another priority is to ensure there is absolute mobility in society, so that everyone keeps moving up, said Wong.
A concerted effort is being made through ComLink to provide more holistic and family-centric support to families with young children living in rental flats, through case workers and befrienders who come together to address each family's concerns, said Wong.
The authorities are looking at ways to provide additional help tied to specific action plans, he added. This means families which work towards achieving goals such as staying employed, saving to buy a home and ensuring their children attend pre-school regularly can get higher and longer-term payouts.
In the next phase of nation-building, there should be greater focus on one's own life goals and to succeed on one's terms, rather than to get caught up in an endless rat race to outdo others, said Wong.
This includes remembering that a large part of one's success is down to the society one lives in, and that people in Singapore operate in a system that enables one to thrive and excel, he added.
Hence, those who have done well in life should do their part to help uplift their fellow citizens: Partly through taxes and transfers, but also through giving, both financially and by adopting causes they feel strongly about.
He noted that philanthropic giving has been growing in Singapore but is still behind, compared with societies like the US. He attributed this to the deeply entrenched Asian mindset to bequeath wealth to the next generation within the family.
"We ought to re-examine our own attitudes, and consider ways to strengthen our philanthropic culture," he said. "Perhaps we should look at family in a wider context — not just our children or our grandchildren, or even our immediate relatives, but people in our wider community, everyone who belongs to our Singapore family."
Wong said this virtuous circle has to be a key feature of Singapore's social compact — that individuals enjoy the opportunity to generate and accumulate wealth, but then recycle and invest part of it back into society to expand opportunity for others.
"The bottom line is that no one succeeds alone," he said. "We truly succeed only when we succeed together as a society."
This article was first published in The Straits Times. Permission required for reproduction.