The Budget delivered last week must be acknowledged as one of the most left-of-centre exercises of recent years. While every Budget seeks to achieve social objectives, the way to do so has tended to be fairly conservative. This year, however, Finance Minister Lawrence Wong grappled resolutely with the dangers of the social contract fraying in the face of economic, demographic and ecological challenges that originate both within and outside Singapore. The differentiating quality of this Budget is the way in which it shifts politically towards taxing high earners more in order to finance higher spending across an ageing society but with the lower-income particularly in view. Thus, even the most contentious part of the Budget - the raising of the goods and services tax rate in the coming years that will affect the population at large - has been cushioned by substantial benefits extended to those Singaporeans who are most vulnerable to rising prices. Mr Wong's bottom line was clear: paying taxes is a social duty, but it is equally the Government's duty to direct consequent spending at upholding the social contract.
This contract is different from that produced by a welfare state, which Singapore is not. Here, individuals remain responsible for their upkeep. This is how Singapore seeks to preserve the economic impetus for work that a small, fledgling country with a trade-dependent economy requires. However, since markets are the best way to maximise the production of wealth but are ineffective in its distribution, it falls on the state to devise and refine means that ensure that the nation coheres as an economic whole.