SDP’s Manifesto: What I like and What I don’t

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Dear friends, following up on my first post dissecting the WP’s manifesto, here is my take on the Singapore Democratic Party’s (the manifesto available here). This time, I have added an extra section at the bottom: Undecided.

Again, please treat this as first impressions. Many of these suggestions merit closer study, which can happen if the opposition has more resources or if the government and its media starts listening to alternative suggestions. Most importantly, what is needed is better data and information from the government. For instance, how big are Singapore’s reserves?

I love the easy, lazy dichotomy that the PAP and its fans have been trotting out these past few days: Either Singapore or Greece.

Please lah. There are many ways Singapore can increase social spending without surrendering itself to fiscal recklessness. As Yeoh Lam Keong has emphasised here, these proposed social spending packages may not be as onerous to Singapore as the PAP makes out.

What I like

Healthcare

[Excerpts]
“The SDP’s National Health Care Plan aims to foster a universal health-care system that is compassionate and fair.

We will do away with the “3M” system (Medisave, Medifund and Medishield) and pay for all health-care expenses through a single pool of funds to which the Government contributes 84 percent. The money in our Medisave accounts will be returned to our CPF Ordinary Accounts.

Singaporeans will pay an average of $400 a year to the National Health Investment Fund (NHIF), depending on income levels…Individuals who earn less than $800 a month, are unemployed or on social welfare will not be required to contribute.

If a Singaporean is hospitalised, he pays only 10% of his total hospital bill, capped at $2,000 per year…
If a Singaporean visits a GP at a family clinic to get treatment for common ailments like coughs and colds, the government pays $10 of the bill and the patient foots the remainder. Co-payment will prevent abuse of the government subsidy.

All public hospitals will run only one class of 2-bed wards instead of the present 4-class system (A, B1, B2 and C). This ensures that those who need urgent treatment get it first, regardless of ability to pay.

Health care is a human need, not a commodity to be traded; the rich should not be able to buy immediate and better treatment while the poor have to wait months on end to receive basic medical care. The SDP’s proposed system aims to be more equitable and sustainable.”

My thoughts:
This is arguably my favourite bit of any party’s manifesto. Perhaps this is the socialist in me, but I simply cannot fathom why one of the world’s richest countries has not yet found a way to guarantee to all affordable healthcare, including many elective procedures that would enable those at the bottom to live a fuller life.

In his speech at Raffles Place on Monday, Chee Soon Juan shared stories of elderly, low-income Singaporeans who prefer to jaywalk, risking their lives, rather than walk the extra 20m to the pedestrian crossing—because of a leg condition that could be easily fixed by “elective” surgery.

Meanwhile, as you all know, Singapore’s emphasis on “family support”—i.e. draining family coffers before public monies kick in—has either damaged relationships in countless families or precluded the elderly from care, as they prefer not to be a burden on their children.

Fiscal implications: these need to be studied.

My assertion is not that we need to embrace this policy wholesale. Rather we need to have an intelligent discussion about the trade-offs, and perhaps Singapore will find some happy equilibrium between what the PAP and SDP propose.

The SDP first came up with its alternative healthcare proposal in 2012. However, since it was not elected, the PAP refused to even discuss it. Proof, if any were needed, that the only way to get new, fresh ideas on the national agenda, is to have new, fresh candidates in parliament.

Let’s not fool ourselves that this is a panacea. Other countries with similar single-payer healthcare systems, from Canada to Taiwan, have their own share of issues to grapple with. For example: “In addition, there is concern of a “brain drain” as high-quality medical graduates leave Canada for better-paying careers in the U.S.” 1

In other words, if Singapore ever moved towards such a system, many highly-paid doctors—such as Susan Lim—might consider moving to greener pastures.

Economy
“..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.”

My thoughts:
Retrenchment insurance would go some way towards compensating the losers from globalisation, something essential for an open economy like ours. Similarly, while I used to be strongly opposed to a minimum wage—on the grounds of market distortion—I am increasingly of the view that we need to consider a well-thought out policy. Tim Harford, “the undercover economist”, has written a good piece about minimum wage misconceptions.

(Note: I have plagiarised myself with this comment. I hope you don’t mind.)

“Only when local talent cannot be found should foreigners be employed.”

My thoughts:
Two simple sentences from the SDP perfectly sum up my own sentiments on a sensible population policy.
First: “Build infrastructure first, then allow in people.” 2
Second: “Only when local talent cannot be found should foreigners be employed.”

The PAP has failed horribly on both counts. Some other opposition parties, meanwhile, propose clamping down on foreigners in a way that is too extreme—sometimes bordering on xenophobia—for my liking.

The SDP hits the nail on the head.
(Of course, as any planner, recruiter or manpower official will tell you, the devil is in the details. Implementation not that easy.)

Education
“Remove PSLE and delay streaming

The stress of exams inflicts psychological trauma on children. It is not an intelligent approach to assess the abilities of primary-school students on a single examination.”

Population
“Foreign PMETs wishing to work in Singapore will be assessed via a point system. Only those with required qualifications, skills, and experience will be able to work here. Employers will be able to hire foreign professionals only if they have made every effort to employ a Singaporean first.”

“Strengthen the Singaporean Identity

To strengthen our national identity, the Ethnic Integration Policy which determines the percentage of ethnic HDB dwellers in each estate should be abolished. The identification of “race” on our Identity Cards should also be removed.”

My thoughts:
YES!
What a ridiculous situation we have today. Half of the people in this country are shoehorned into these fixed stereotypes of race, of language, forced to live according to quotas in housing estates.

The other half of the people here, including all the foreigners and many in private homes—they can do whatever they want. Speak whatever dialect. Live wherever they want.

Two halves. One side forced to accept the government-sanctioned identity. The other side free to be whoever they want. Is this what a global city looks like?

The Malay Community
“Nationalise preschool education
Researchers at Harvard University found that kindergarten education can affect learning and classroom achievement of students. The Government should take charge of kindergartens and provide trained teachers and inexpensive fees instead of leaving preschools unregulated.

Fund madrasahs
Presently, madrasahs do not receive state funds even though their students sit for the PSLE and the O-levels. Madrasahs should receive state funding, consistent with the Government funding of missionary schools. In return, madrasah schools will recruit non-Muslim teachers to teach secular subjects.”

My thoughts:
We need to equalise preschool education somehow. Unequal preschool education is a major reason kids no longer compete on a level playing field. Now, I am not convinced that nationalisation is necessarily the best way. But let’s have a deeper, honest conversation, not one vulnerable to the PAP’s free-market convictions.

Meanwhile, I am no expert on madrasahs. But this seems to make sense. If mission schools are funded, why not madrasahs? (Thoughts welcome.)

“End discrimination in the Singapore Armed Forces (SAF)
Distrust of Singaporean Malays who serve in the SAF will breed disloyalty and negatively affect our country’s national security. Recruitment and promotion of SAF personnel, including NSmen, should be based on performance and not race.”

Introduce the Fair Employment Act
Anti-discrimination legislation should be introduced to minimise workplace discrimination against minority ethnic groups, including hiring practices in institutions like the SAF.”

My thoughts:
It is unconscionable that new migrants from China and India are afforded a higher security status in the SAF than Malays whose families have lived here for generations. The PAP is bound to a 1960s worldview that is anachronistic and discriminatory.

Ministerial salaries
“The paper makes five key recommendations to rein in the high salaries:

Establish an independent salary commission to determine ministerial remuneration for each financial year. Such a commission shall compile and publish annually the salaries of ministers, along with their other commercial interests.

Do away with variable bonuses such as the GDP Bonus and the Performance Bonus which together can make up to as much as 22 months of the ministers’ basic salary. Instead, the pay should comprise of the fixed salary components.

Peg ministerial pay to the bottom 20 percent of Singaporean wage earners. The SDP recommends that the MP allowance be 10 times $1,400 (mean wage of the bottom 20th percentile based on the assumption of a minimum wage in place). Ministers are paid three times the MP allowance while the prime minister 4 times more. This will bring the PM’s pay to about $56,000 per month. Such an approach will ensure that the living standards of this group rise with the rest of the population.

Provide ministers with allowances for expenses incurred while performing their official duties. The claims should be published to ensure transparency and accountability.

Move the Corrupt Practices Investigation Board (CPIB) out of the Prime Minister’s Office and empower it to investigate all ministers without needing the approval of the President of Singapore.

What I don’t like

Economy

“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.”

My thoughts:

I am not yet convinced that the Minimum Sum Scheme in and of itself is bad. With a more equitable wage structure, with higher wages for the lower- and middle-income segments, perhaps it could ultimately prove a useful way of retirement planning. With a Sum amount that is sufficient for survival in the world’s most expensive city.

Education

“Scrap school and class rankings
Comparing examination results and ranking students and classes detracts from the real purpose of education, which is self-improvement and self-actualisation.

”

My thoughts:

Hmm. Instinctively this appeals to me. But then again, some kind of ranking may be useful to identify areas for improvement. I think I prefer an emphasis on modifying labour demand, i.e. the civil service, PAP, GLCs should place less importance on a person’s paper grades. This will filter down through society.

Undecided

Housing
“The SDP proposes a new Non-Open Market (NOM) scheme to help reduce the prices of HDB flats. Under this scheme a segment of new HDB flats will be priced at cost (including labour, material and administrative costs) minus the land “cost” that is currently factored into HDB prices.

Flat prices will hence be substantially lower, ranging from $70,000 for 2-room flats to $240,000 for 5-room flats.

As the name implies, however, flats bought under the NOM scheme cannot be re-sold in the open market. Owners wishing to dispose of their NOM flats will have to sell them back to the HDB.

Singaporeans who purchase NOM flats will take an estimated 9 to 15 years to pay off their housing loans compared to about 30 years under the present PAP system

Current owners of HDB flats can continue selling their flats in the open market (OM). Policies regulating OM flats will remain relatively unchanged….”

The rationale behind this scheme is that the Government should not profit from Singaporeans when it comes to public housing. Public housing is a social good and should be used to meet the housing needs of the population instead of being a vehicle for profit – whether the Government’s or citizens’.

My thoughts:
Apart from healthcare, this was the SDP’s other big alternative policy released some time back—which, yes, again, the PAP refused to debate because the SDP was not elected.
It appeals to me, but there are a lot of unanswered questions in my mind. Mostly, what is the likely impact on our overall real estate market? Including on HDB resale property prices?

Economy
“Temasek Holdings 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.”

My thoughts:
I agree with the second half, but why should Temasek Holdings be eliminated? Unclear. Even if we want to break up or sell off further chunks of our GLCs, there could still be a place for the holding firm.

Education
“The SDP will reduce class size in our schools to 20 pupils per class from the current 40 to provide students with the necessary individual attention to help them develop academically.”

My thoughts:
Nice, but how? Seems quite unfeasible in terms of resources.

Cost of living
“reducing the GST from 7% to 3% and abolishing the GST for essential items such as rice, oil, medicines, etc,”

My thoughts:
Over the years, Singapore’s tax code has become more regressive: lower income and wealth taxes, higher GST. Yes, we need to make it more progressive. That said, I’m not convinced this is the best way. Greater targeted subsidies at a broader pool of lower-income people might work better.

1 https://en.wikipedia.org/wiki/Single-payer_health_care
2 From a Paul Tambyah speech, Monday Sep 7th 2015

Image credit: Straits Times

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3 responses

  1. Sudhir, the Non-open-market proposal for housing suffers from mixed terminology. SDP talks about a price for the flat, when a better way to view it is to see that it’s not a real estate purchase, but an indefinite lease from HDB. The “owner” gets a right to stay in the flat for as long as he or she wishes, and also has a right to hand it back to HDB at a certain payment from HDB (determined by formula, which includes future elements of cost). If we see it that way, then we can expect that a certain number of flats would be taken out of the market. How many depends on how popular the scheme is.Then the market operates on fewer flats available, but also operates on fewer buyers. So my guess is that there will be no drastic effect on the HDB resale market, and any effect will likely be gradual since I doubt if uptake of such non-open-market flats will be rapid given its novelty.

  2. Pingback: GE2015: I The BS is Strong in This One, Chee Soon Juan | happiebb.com

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