Transcript 1 & 2. Public Policy: Introduction & Approaches

Department of Social Work and Social Administration
UNIVERSITY OF HONG KONG
M Ramesh
Poverty Reduction Strategy – Singapore
Introduction
Singapore’s welfare system has been described as a “full
employment” model Chew, 2006) and as a “capital
investment state” (Tang, 2000) L
Singapore government firmly believes that economic growth
is the best (only?) way to address the problem of poverty
The strategy has largely worked
Singapore has had one of the highest economic growth
rates in the world over the last four decades
Widespread abject poverty does not exit (though no
data available!)
GDP Growth, %,
Annual Average
High income OECD
Singapore
1990-1995 1996-2000 2001-2007
2.19
8.93
3.06
6.40
2.19
5.35
Introduction
The problems with this strategy are
Growth has been low in some years
Some people have not benefited from growth, and their
numbers is increasing.
Wages for low-income earners have declined in real
terms in recent years
Recent inflation has hit the poor hardest
Income inequality is high and rising: gini rose from
0.442 in 2000 to 0.485 in 2007 (an under-estimate!)
The focus of my discussion is:
What is the government of Singapore doing about the
problem of poverty?
How well is it doing it?
The answers are discouraging.
The Thinking underlying social policy in Singapore
The government subscribes to an essentially Liberal
conception of state’s role in social protection
Individuals should fend for themselves
Family should look after those who cannot fend for
themselves
State should be the last resort because public social
protection
Undermines work incentive incentives
Distorts labour markets
Weakens public finances
Undermines family and community
The Minister for Community Development described the
government’s strategy as one of “assistance, not welfare;
mutual obligation, not entitlement” (Balakrishnan, 2005).
The Thinking underlying social policy in Singapore
State to provide assistance only
To only those with “good” reason for being poor and no
family to turn to
And only to a minimal degree: not meant to cover all
essential costs
Assistance programs in Singapore are therefore stringent,
provide small benefits, and of short duration.
Public Assitance
Available to Singapore citizens who:
“Are unable to work owing to old age, illness or
unfavourable family circumstances; and
Have no means of subsistence and little or no family
support.”
To receive benefit, one’s income needs to be below
S$400 a month or 9% of per capita GDP
PA rate is S$330 a month for elderly individuals, $1,020
for a family of two adults and two children, and $1,100 for
family of five or more members.
S$330 is equivalent to 7 % of per capita GDP
Compared to OECD average of 25% of per capita GDP
ComCare
It provides short term-assistance
It is funded from a government-established endowment
fund of S$1 billion
only the earnings are used to pay benefits
ComCare programmes include:
(1) ComCare Enable, targeted at those who are unable to
work and have no other means of support;
(2) ComCare Grow, for children from low-income families
and
(3) ComCare SelfReliance, which is focused on assisting
individuals and families in financial difficulty due to
unemployment and the like to regain independence
• Small programs overall: only 2,754 cases in 2007
Workfare Income Supplement (WIS) scheme
Benefit for low-wage older workers to incentivise them to
remain in the workforce
Subject to means test: <S41,500/month earning
And employment in previous 6 months
To improve empoyability of such workers, contribution to
Central Provident Fund (CPF) for both employer and
employee is reduced.
The maximum payout per year is between S$900 for
those aged 35-45 and S$1200 for above 45
75% of the benefit amount is channeled to CPF
Main purpose seems to be to address the
shortcomings of CPF rather than supplement wages
Total Expenditures: ??
Other programs
Poor also have access to
Nearly full primary and secondary education for entire
population
Means tested free health care
Subsidized housing
Subsidized utilities
“Growth dividends” whereby government ‘shares’
budget surplus with population on ad hoc basis
Available to everyone (S$100) but poor get more
(S$400)
Social Protection Expenditures
Many small programs for the poor
Makes the total expenditure directed at the poor hard to
calculate
Social protection expenditure is projected to be S$168
million in 2008 – equivalent to 0.07% of GDP
The government estimates that a single elderly can expect
to receive S$1000 in cash by the end of the 2008,
excluding benefits received from charities (MCYS Media
Release, 11 April, 2008)
Detailed breakdown not provided
Conclusion
Programs for the poor
Apply stringent means test
Require family to support
Aim to maintain labor market incentives or shore up
provident fund that does not work for the poor
Offer small benefits for short period of time
Fragmented
Lack transparency
What exists now is vast improvement over what existed
only a few years ago
Government realizes that it cannot count on economic
growth alone to address the problem of poverty. But
limited by its ideology.
Average Monthly Household Income from Work
Among Employed Households by Decile
Deciles*
1st – 10th
11th – 20th
21st – 30th
31st – 40th
41st – 50th
51st – 60th
61st – 70th
71st – 80th
81st – 90th
91st – 100th
Average Monthly Household Income from
Work ($)
1995
2000
2005
2006
2007
4360
5410
6010
6260
6830
1070
1270
1150
1160
1210
1720
2060
2060
2120
2220
2240
2730
2820
2870
3040
2780
3340
6540
3660
3920
3330
4030
4400
4470
4880
3940
4800
5220
5460
5840
4670
5690
6400
6440
7080
5640
6830
7690
8010
8720
6990
8540
9720
10140
11190
11190
14840
17080
18310
20240
Source: Singapore, Department of Statistics, Key Household Income Trends 2007,
February 2007, Table A2