Policy: Economy

6 August 2015

The Problem

Singapore’s economy has registered dramatic growth in the last half century. This expansion has, however, come at a cost. It has been driven by the PAP which pays scant regard to democracy and the rights of Singaporeans. Because of this, problems have been emerging.

Income inequality, a dispirited workforce, the absence of an entrepreneurial class, our reputation as a tax haven, and the unhappiness of the local populace with the influx of foreign labour have raised questions about the sustainability of the country’s current economic model.

SDP’s Solution

The SDP has drawn up an alternative economic programme to chart a different course for our economy. Our programme emphasises fairness and promotes equality and equal opportunity for all. It is one that is people-centric and has as its prime objective the well-being and happiness of Singaporeans. It is also an alternative that is both realistic and sustainable.

Our vision is to create an economic system that benefits all Singaporeans, one that makes our society more egalitarian by tapping on the people’s innovative best.We seek to level up society. We need a system that works for the people, not vice versa.

At a glance, this is the SDP’s plan:

Redefine economic progress

We propose an alternative indicator of economic progress. The PAP relies on GDP growth as a measure of society’s wellness. The problem is that GDP is a misleading indicator that does not take into account the cost (social, environmental and financial) of production. With an alternative index, such as the Genuine Progress Indicator (GPI), that comprehensively measures the cost and benefit of economic growth, we can better gauge the efficacy of our policies. Under our programme, the quality of life and overall happiness of our citizens will be the guiding factor for economic growth.
Reduce income inequality

As Singapore’s GDP growth rate rises, so has income inequality and poverty in the country. To ensure that workers are not exploited, we propose the legislation of a national minimum wage. Retrenchment insurance will also be introduced to provide retrenched workers with support while they look for re-employment.
Encourage entrepreneurship

Our workers’ productivity has been falling to dismal levels. To address this problem, we will work to ensure that our society is free and open so that innovation can thrive. Workers must be intrinsically motivated; only this will ensure that they excel in whatever they do and add value to the goods and services they produce. We also aim to cut down on importing cheap foreign labour and ensure that employers employ Singaporeans first. Only when local talent cannot be found should foreigners be employed.
Eliminate GLCs, increase SMEs

We aim to encourage enterprise by divesting inefficient government-linked companies (GLCs), which are competing with and slowing down the growth of our small and medium enterprises (SMEs), of their untouchable status. One effective way to help local SMEs grow is to reduce land costs and rentals. We will also work towards weaning our economy off its addiction to multinational corporations (MNCs).
Remake the GIC/Temasek model

Singapore’s reserves are, effectively, kept with the government through two conglomerates: the Government of Singapore Investment Corporation (GIC) and Temasek Holdings (TH). These entities are currently being run in a less than transparent manner. The SDP believes that our country’s reserves should work for the people, not the other way around. TH should be eliminated and the GIC’s operations must be made transparent and its accounts made public. The GIC must be restructured to function independently of the ruling party – no member of parliament or their relatives should hold governing positions in the company.
Increase social spending

We recommend allocating more resources to help the most vulnerable segments of our society. We believe that social welfare assistance for the poorest of our poor must increase in order to reduce poverty. The SDP does not advocate deficit spending on a continual basis, but we are convinced that the national budget for social programmes and health care must be increased in order to support the needy and elderly.
Abolish the CPF Minimum Sum Scheme

Retirees depend on their CPF savings to meet living expenses. Withholding their savings through the Minimum Sum Scheme is not only impractical but also immoral. The scheme must be abolished and the money returned to members when they turn 55 as originally promised.
Empower workers

Beyond a certain level, no amount of coercion can bring about higher-quality output and productivity. We must empower our workers and upgrade their minds and attitudes by returning them their freedom; it is when they feel a sense of belonging to society that they will be motivated to contribute more than what is asked of them.

Singapore needs a new economic model that will take us into a new era of sustainable growth – one that will allow us to compete on the international stage instead of consigning our workers to a cycle of working harder and longer for less and less; one that uplifts our people instead of dumbing them down; and one whose priority is the well-being of all Singaporeans, not just the rich.

We must work towards an enlightened economic system.

Read the full paper A New Economic Vision: Towards Innovation, Equal Opportunity and Compassion here.

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