Less taxes, more public services, Singapore style

Friday 03 December 2021 10.00 am

London should take its example from Singapore

It IS possible to have your cake and eat it too: universal, high-quality public services at a fraction of the cost to taxpayers with a strong economy. It’s not just a figment of my imagination. This is the country where I grew up: Singapore.

The Singapore government spends about £3,500 less per person than Britain on social services, but significantly outperforms the UK on education and health care. Britons could benefit from a more Singaporean approach to public policy, as I highlight in my new article for the Adam Smith Institute.

Singapore uses market-based principles in various areas, from education, health and social security to transport and trade. Not only is much left to market forces, but even state-linked enterprises must remain efficient, thanks to public-private partnerships, competition between government agencies, and a high degree of organizational autonomy.

For example, after independence in 1965, Singapore rejected the British colonial heritage of the NHS-type healthcare model and instead sought to emphasize competition and choice, while maintaining universal care. This is achieved with, according to Bloomberg, the “most efficient” healthcare system in the world. Singaporeans have a strong culture of hard work, meritocracy and personal responsibility. Individuals and their families, rather than the state, are the primary source of help. The central element of Singapore’s social security system is the Central Provident Fund (CPF) compulsory savings accounts. Citizens are required to save throughout their lives to build up resources for health, education and housing expenses.

This savings system ensures individual choice and greater competition in the provision of services. But that doesn’t mean low-income people, who can’t save, have to fend for themselves. On the contrary, the state intervenes to help, guaranteeing equitable access.

Meanwhile, Singapore’s “workfare” system gives people the skills they need after losing a job to secure re-employment. Social security assistance is primarily distributed through civil society groups, rather than centrally, allowing for local interventions and identification of those most in need.

The lower cost of public services means less debt and lower taxes, which contributes to greater prosperity, as well as an open and free-trade economy. Singaporeans are about 50% better off per capita than Britons.

Singapore is by no means a perfect country. But he is very right. There are many things the UK could learn from.