Welfarism need not be a bad thing

Moving towards a welfare state is not necessarily a trap and, if managed correctly, can bring about tremendous benefits for national development ("Beware the welfarism trap"; Sept 1).

Critics cite the high taxation that is associated with the provision of generous social benefits by the state. However, since citizens receive a large amount of essential services in return, such as healthcare and education, for little or no additional cost out of pocket, the trade-off is worthwhile.

Other detractors might claim that such a system reduces the incentive to work. In reality, the opposite is true.

The key is in the socio-economic system that generates sustainable wealth from the workforce, with good work ethic and high productivity ethos to share, protect and cherish their hard-earn social benefits.

Research conducted by the Oslo and Akershus University College of Norway found that the more a country paid to the unemployed or sick, the more these people felt obliged to get back to work. In essence, it is human nature to reciprocate state benefits with meaningful work.

This was augmented by heavy state investment in gainful employment schemes for these affected groups, to ensure a quick return to being productive members of society.

A welfare state can also boost the total fertility rate (TFR). Where the basic needs of the people are met and parents need not worry about the financial burdens of raising a child, thanks to extensive state support, conditions are conducive to starting a family.

For example, last year, Norway, a country with an extensive social welfare system, recorded a TFR of 2.0, compared with Singapore's historic low of 1.2.

Norwegian parents are entitled to generous state grants and subsidies for childcare services, medical costs, and education from elementary school through to university. But Singaporean parents must cover a large amount of such costs by themselves, due to more limited government assistance.

So far, we have seen the Singapore Government make use of transfer payments to prevent needy and low-income households from falling through the cracks. This is a step in the right direction.

Should we make more decisive moves towards a welfare model, we would do well to consider how such a system could be properly implemented so as to maximise the benefit to society.

Paul Chan Poh Hoi