Asian welfare states

Joe Hockey has been stirring up debate suggesting that we might look less to Europe and more to Asian countries on how to configure our approach to delivering welfare services. While Hong Kong came up as the obvious reference point, there is probably a lot more written on Singapore. Both the late BA Santamaria and more recently Noel Pearson have advocated looking at the Singapore model. Singapore’s approach to welfare might also be more acceptable as a starting point for welfare reform even to our centre left and centrist thinkers as it isn’t as bare bones as the strawman ‘Brutopia’ models they may imagine. Pearson summarises the Singapore model as follows:

Central to the entire approach is the compulsory savings system of the country’s Central Provident Fund. The leaders of Singapore built around the CPF an array of individual and family solutions for home and apartment ownership, retirement funds and healthcare co-payment insurance funds. They mandated family-based solutions to welfare while subsidising those things that enhanced the earning and asset accumulation capacities of individuals.

By mandating a universal approach to compulsory savings and home ownership, Singapore included everyone in the society. The denizens of the shanties were not left to their own devices. They, too, were obliged and supported into apartment ownership

The Economist also had a profile of the Singaporean welfare system from a few years ago though I think it makes it sounds harsher than it actually yes. Here’s an extract:

Citizens are obliged to save for the future, rely on their families and not expect any handouts from the government unless they hit rock bottom. The emphasis on family extends into old age: retired parents can sue children who fail to support them. In government circles “welfare” remains a dirty word, cousin to sloth and waste. Singapore may be a nanny state, but it is by no means an indulgent nanny.

The government does run a handful of schemes directed at some of the needy, from low-income students to the unassisted elderly. But these benefits are rigorously means-tested and granted only sparingly. The most destitute citizens’ families may apply for public assistance; only 3,000 currently qualify. Laid-off workers receive no automatic benefits. Instead they are sorted into “workfare” and training schemes.

One thing to note about the Asian approach to welfare whether it’s Hong Kong, Malaysia or Singapore – it’s probably a lot easier for people to find new jobs in these countries because the costs of setting up businesses are lower and labour markets are more flexible and less regulated. This and the cultural norm of shame in taking handouts, at least in the entitlement based forms we see in Western welfare states rather than in the form of subsidised provision of ‘merit goods’ (such as Singapore’s polyclinics) help keep down dependency levels.

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