PUBLISHED : Tuesday, 20 August, 2002, 12:00am
UPDATED : Tuesday, 20 August, 2002, 12:00am

ONE DOES NOT get to hear Singapore Prime Minister Goh Chok Tong very much these days. As one local commentator noted recently, he has taken a lower profile this year, leaving more column inches for his eager successor, Deputy Prime Minister Lee Hsien Loong.

So it made a refreshing change to listen to Mr Goh's National Day Address, Singapore's equivalent of the United States president's State of Union speech.

Delivered late on Sunday, Mr Goh's observations were noteworthy this year for two complementary themes.

His first was a warning about the rise of the mainland, which came complete with a small (and accurate) dig at Hong Kong. The second was further notice that the government is preparing to allow wealth disparities in the city-state to widen much further.

'It is not just Singapore which has to adjust to China's entry into the global marketplace. Hong Kong is even more worried . . . even feng shui experts in Hong Kong are rearranging their furniture to improve their luck.

'They, too, have to ward off competition from China!' the prime minister said.

Much later, he added: 'Singaporeans have to pick themselves up when they fall, and not expect the government to come to their aid. They have to be more self-reliant. The government will, therefore, let Singaporeans do more for themselves, and not jump in too quickly to help.'

Of course, these twin concerns are related. In the view of Mr Goh's administration, to respond to China effectively Singapore must court higher value-added services. To do that means, in theory at least, allowing entrepreneurs greater material reward.

Already this year the tax regime has been overhauled, placing a greater share of the burden on those least able to pay, with a planned rise in consumption tax from next year as direct taxes are chopped back.

This reordering of the fiscal base is significant. In the 1960s through to the 1990s, the mantra from the ruling People's Action Party was that even as government-directed development proceeded apace, egalitarianism largely held sway.

As the recognition now spreads that the limits of state-directed economic change have largely been reached, the impulse toward social levelling has been cast aside.

The prime minister's hope, and that of his cabinet, is that a closer embrace of market forces will keep growth rates close to the level generated by the earlier emphasis on state planning coupled with wealth redistribution.

This shift represents a change of both style and substance, and is one that has many citizens worried.

'Everyone is angry. Everything is getting more expensive for us,' one local said yesterday morning as we picked over the bones of Mr Goh's speech.

He reeled off the changes, starting with the planned jump in goods and services tax next January. In many ways, the unhappy fellow is right, especially for the older, less-educated generation for whom the current challenges are the most threatening and bewildering. Times for many people in the post-recession Lion City are hard indeed.

The main challenge for Mr Goh - and those who succeed him in Mr Lee's cabinet - is a political one: selling this brave, new and somewhat unpleasant world to the country's voters.

For decades, Southeast Asia's most paternalistic government instructed its people that in exchange for political obedience and industrial diligence, it would take care of pretty much everything.

Now it is telling them that with China on a roll, all that is history.

Jake van der Kamp is on holidays