In many ways, the 2012 Budget represents a shift towards a new compact between the PAP government and the people.
It recognises the desire of a younger generation to go beyond a naked drive towards material well-being and accumulation of wealth. The old compact with our parents' generation was a simple one – give the PAP a popular mandate and they will make sure we are materially better-off year-after-year. Most attention was given to GDP growth, which by definition focuses on the welfare of the average Singaporean. Our GDP per capita still ranks amongst the highest in the world, even on a purchasing parity basis, which means that the average Singaporean lives better than the average citizen in other countries.
This is not enough for the new generation. The PAP has successfully taken Singapore to developed-nation status but has in the process bred a new generation that has post-materialist desires – desires that go beyond the bread-and-butter. In this, we are not any different from other developed countries. Bread-and-butter issues are of course still important, but for the new post-materialist generation , it is not enough to merely grow GDP per capital , but also to ensure that in our pursuit of growth, nobody gets left behind and we build a cohesive and inclusive society. This Budget recognises this in several ways.
Firstly, it recognises that even though foreign workers have been instrumental in our years of breakneck growth, their presence in our society has not been without costs. On an emotional, psychological basis, when almost a third of people residing in Singapore are foreigners, there is bound to be an impact on our social make-up. Not only do we have to share our already crowded living spaces with more people, it is with people we find difficult to identify with as they come from different cultures. It also causes fissures and frictions in our social make-up. In a society still in its adolescence which is still struggling to find a Singaporean identity, this cannot but be detrimental.
If however we make a choice that we want a society that has a smaller number of foreigners, it is also not without costs. This is the nature of policy making – there is no perfect policy, no right answer, but a choice between several options each with costs and benefits.
In this case, if we want to make do with fewer foreign workers in our society, Singaporeans have will also have to adapt, and this adaptation could in the short run also be painful.
Firstly, businesses have to increase their productivity so as to make do with fewer workers. This is easier said than done. The government recognises this and has introduced a slew of measures in the Budget to help businesses including a small cash grant, an enhanced Productivity and Innovation Credit Scheme and other measures. The road to a lower reliance on foreign workers will nevertheless be a long and hard one, especially for small businesses.
To begin with, most small businesses operate on a tight cash-flow and run on a day-to-day, month-to-month basis. In order for them to invest in workers now so that will see an increase in productivity in future (that may or may not happen), is to ask them to forgo precious cash that they need now for an intangible future. The PIC schemes still work on a reimbursement basis, meaning that firms will need to fork out their money first. Although the enhanced PIC now pays out on a quarterly basis, a quarter is a long time for small business that operates on a tight cash-flow. It may be difficult for them to spend $10,000 and then have to wait 3 months to get $6,000 back.
More importantly, training in order to increase productivity is not immediate. Whereas if one hires a foreign worker one sees the immediate benefit as he can be put to work from the outset, a local worker isn’t going to be able to miraculously start being able to serve 10 tables in a minute after a week’s training course. In the meantime, as new processes are put into place, and as workers learn more productive methods, businesses suffer from a manpower crunch which can put them out of business.
Ordinary Singaporeans will suffer too. When businesses go bust, Singaporeans also lose their jobs – and let’s not forget that many business owners are also ordinary Singaporeans trying to make a living. Singaporeans as consumers will also be impacted. Recently, I have noticed that the tables at Starbucks do not get cleared as fast, as they are unable to hire as many foreign workers as in the past. We as Singaporean consumers will thus also have to adapt.
A second post-materialist desire this budget recognises is that it is not enough anymore for the government to roll-out statistics that Singapore as a whole is doing better and better every year – the younger generation also want to make sure that the worst-off and most vulnerable in our society are also taken care off.
Budget 2012 recognises this by taking significant steps to ensure that 3 groups of particularly vulnerable Singaporeans are not left out – the old, the poor, and the disabled.
I too believe that it is the mark of a developed society to have compassion for our least well-off. To this end, I applaud the generous measures that the government has introduced, that will cost billions of dollars.
But again, nothing comes free and money does not grow on trees. The money that the government is spending to help the least well-off comes from public finances – that is the money that belongs to us, the taxpayers. It is all well and good to wear our hearts on our sleeves and wax lyrical on compassion and helping others but the litmus test is always when we are asked to put our money where our mouth is. At this moment, our public finances are in good shape and the government is able to spend money without raising new money. However, if one day we are asked to pay more taxes in order to keep these measures up, will we be ready to do it? Are we willing to put our money where our mouths are when push comes to shove? It is always easier to champion compassion and charity when one does not have to bear the costs or feel the pinch of doing so.
Finally, in our push for a more inclusive Singapore, we must not forget the bread-and-butter issues that face every Singaporean. In an uncertain global outlook, we must not get too obsessed with navel-gazing and be acutely aware that the greatest challenges that Singapore face come from outside. In our quest to be less dependent on foreign workers domestically, we must not forget that we will always as a country be dependent on foreigners and the world outside, given our size. In our quest to perhaps run a little slower so that our least well-off can keep up, we must not forget that we must still run faster than everybody else as it is the only thing that ensures we survive as a country. We are an improbable nation built against the odds. As we build a stronger and more cohesive nation, it must always be to one end – that we remain a prosperous, independent country, a united Singapore we call our home.