Progressive policies allow Singapore to surpass Hong Kong

PUBLISHED : Sunday, 20 April, 2014, 5:33am
UPDATED : Sunday, 20 April, 2014, 6:03am

Our competitiveness and our quality of life have been surpassed by those of the Lion City.

The Singaporean government, since Lee Kuan Yew's time, has implemented populist, but practical, policies. Intervention and control were vital to ensure the People's Action Party retained power, by first providing livelihood imperatives to the masses, ensuring stability and prosperity. Singapore's redistributive measures include affordable home ownership, where property is sold at a price minus its land cost; affordable and good education and health-care systems; and an excellent Central Provident Fund (CPF) retirement scheme.

We adopt an obtuse, non-interventionist policy, as doing more is termed "welfarism" and dependence.

Big business and tycoons uphold free markets and low taxes, making their fortunes by rent seeking. The crony-capitalism index in The Economist magazine recently rated Hong Kong as number one in crony capitalism.

China's state-controlled capitalism has done better, transforming its middle class into a consumer society. Our competitiveness is due largely to low and stagnant wages, long working hours and an artificially undervalued Hong Kong dollar, which reduces wage earners' purchasing power and savings. Another factor is the lack of taxation; even Singapore and China have a goods and services tax and value added tax respectively.

Our productivity gains are reflected in increased asset prices and not currency appreciation.

Singaporeans' CPF accounts benefit through owning commercial property here. They benefit from our retail tourism without suffering the social costs and overcrowding felt here; while many Hongkongers can't even afford their own home or to retire with the Mandatory Provident Fund.

Free markets allow tycoons to own supermarkets and pharmacies and electricity, telecommunications, shipping and property development companies, creating a business fortress that is impenetrable to competition.

Singapore has surpassed Hong Kong to the extent that it now has the luxury of trading off competitiveness to promote equality. This comes through income supplementation schemes, increasing employer CPF contributions and a more progressive taxation system.

Our politicians squabble over democracy and free speech instead of improving society's well-being. Will they do better for us in a democracy?

Not all democracies flourish, especially in Asia; just take a look around.

Bernard E. S. Lee, Tsuen Wan