Less tax, higher public services, Singapore-style
IT’S possible to have your cake and eat it too: high quality and universal public services at a fraction of the cost to taxpayers along with a strong economy. This is not just some figment of my imagination. It’s the country where I grew up: Singapore.
The Singapore government spends about £3,500 less per person compared to Britain on social services, yet substantially outperforms the UK on educational and healthcare outcomes. Brits could benefit from taking a more Singaporean approach to public policy, as I outline in my new paper for the Adam Smith Institute.
Singapore uses market-based principles in various areas, from education, healthcare and social security to transport and trade. Not only is much left to market forces, even state-linked enterprises are expected to remain efficient, through private-public partnerships, competition between government agencies, and a strong degree of organisational autonomy.
For example, after independence in 1965, Singapore rejected the British colonial legacy of the NHS-style healthcare model and instead sought to emphasise 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 self-responsibility. Individuals and their families, rather than the state, are the first source of help. The central plank of Singapore’s social security system are Central Provident Fund (CPF) compulsory savings accounts. Citizens are required to save throughout their life to build up resources for healthcare, education and housing expenses.
This savings system ensures individual choice and much greater competition in service delivery. But it does not mean low-income individuals, who cannot save, must fend for themselves. Rather, the state steps in to help, ensuring equitable access.
Meanwhile, Singapore’s “workfare” system equips people with necessary skills after losing a job to ensure rehiring. Social security support is substantially distributed through civil society groups, instead of centrally, thereby enabling local interventions and identification of those most in need.
The lower cost of public services means less debt and lower taxes, which contributes to higher prosperity, along with an open, free-trading economy. Singaporeans are about 50 percent better off per capita compared to Brits.
Singapore is by no means a perfect country. But it has got a lot right. There’s much that the United Kingdom could learn.