Merdeka Generation Package is evidence of PAP failure

by Khush Chopra

Prof Teo You Yenn, Associate Professor and Head of Sociology at Nanyang Technological University, Singapore in an op-ed for Straits Times today, wrote that “introducing one-off, cohort-based rewards is, arguably, not a principled, sustainable, or solidarity-enhancing way to protect people in retirement.”

The author of “This Is What Inequality Looks Like”, also noted that the need for an Merdeka Generation Package (MGP) is a sign to rethink the theory that current systems are working as they should and need not be fundamentally fixed. Singapore is currently in a good financial position to make bold moves to address these challenges so that Singapore is indeed future-ready.

Her views echo my own sentiments stated many times that the state of our elderly and those entering retirement speaks volumes about the PAP Government. She also says that the system the People’s Action Party has put in place is not working and needs to be fixed.

She also feels these packages do not address the underlying causes of inequality and distress within our society.

Elderly distress is a symptom of a system that is sick. The disease is the PAP, the ruthless system they have championed and their failed policies that just don’t serve ordinary Singaporean’s well any more. Budgetary packages like the MGP are just placebos that do not resolve the dire chronic imbalances in our way of life here.

Just as I have many times called for a total systemic overhaul in setting new priorities to achieve a better quality of life for all, Teo You Yenn who is well known for her research into inequality issues and her book on the subject joins the chorus of voices seeking systemic change wrote:

“The MGP, for yet another cohort of Singaporeans entering into retirement age, signals persistent unmet needs that mass education, near-universal housing ownership, and mandatory savings from wages, did not once and for all resolve for everyone…..

The systems in place for retirement are not in fact adequately meeting everyone’s needs. It follows that we require a more systematic and durable solution (rather) than another one-time fix aimed crudely at a single age cohort.

The need for an MGP is a sign to rethink the theory that current systems are working as they should and need not be fundamentally fixed. Singapore is currently in a good financial position to make bold moves to address these challenges so that we are indeed future-ready.”

While I have made a similar point about fundamental systemic change many times, please do not just take my word for it but rather please take Teo You Yenn’s expert view on the subject.

Quite apart from the fact that these one-off packages like the MGP and PGP only provide some measure of monetary symptomatic relief, it would seem to me that there are several other reasons to move on beyond these one-time packages.

To my mind as pointed out by Kenneth Jeyaretnam recently, they amount to nothing more than political sophistry; fiscal trickery in fact.

Although the Ministry of Health says that “Our public healthcare institutions (PHIs) operate on a non-profit basis” and that “PHIs require substantial funding from the Government in order to provide subsidised care to patients”, are the PGP and MGP not a subsidy?

They are balance sheet operations that amount effectively to the Government taking out money from the left pocket and putting it right back into their right pocket.

The other reason why these packages are highly suspect fiscal devices is the fact I have no doubt the Government is profiteering from the medical miseries of ordinary citizens and these packages fuel that profiteering.

I can think of four profit centres. First there would be the cost of medication. They are high and in some instances as high as those in private hospital especially for higher class ward patients which are substantial. Second, these hospitals pay the Government for certain capital overheads, rental and services. Third the Government collects GST and finally the annual reports of our PHI’s literally show substantial operational profits on revenue after expenditure.

So through these packages the Government is essentially paying themselves for our medical misery in total conflict of interest as it is in the interest of Government Hospitals to charge you more for hospital services and medication not less. They are profiteering at the expense of the people while appearing to be generous.

It is my view that the more money you throw this way the higher medical costs will become in Singapore as there is no incentive to increase efficiency or reduce costs.

Yet another reason why these packages are undesirable is because they are discriminatory towards non- beneficiary ordinary citizens denying citizens their constitutional right to equality of treatment under the law. On what basis can this discrimination in public expenditure be justified?

Why should the other non- beneficiary ordinary citizens accept this unfairness? Such cohort based social welfare must surely cause resentment from those who see no real benefit.

The PGP and the MGP have a punitive effect on non – beneficiaries. As the Government throws money at these cohorts, the cost of medical care and consequently the shield insurance schemes will go up and eventually can become unbearable for others not covered by these packages as there is lesser broad based downward pressure on health care related prices.

There will essentially no longer be broad based price resistance since a large segment have package benefits which are direct non consumer based hospital administered transfers again in conflict between public interest in keeping health care costs low and the hospitals profit interests and Government’s interest to recover public expenditure.

Just as the distressed and impoverished state of our elderly in Singapore speaks volumes about our Government and is the clearest evidence I can give to you to prove that the PAP Government has totally failed ordinary citizens in continuing to persist to operate a system that is fundamentally now broken and needs to be fixed; one- off funds and packages like the Merdeka Generation and the Pioneer Generation Packages are equally clear evidence of PAP failure.

The Merdeka Generation Package again goes to prove the case that PAP policies have failed ordinary citizens and are merely short term vote buying tactics to cover up chronic policy failures that neither provide adequate immediate symptomatic relief nor the required essential long term sustainable structural change in terms of a total systemic overhaul in setting new priorities to achieve a better quality of life for all.

If the PAP Government is as successful as the 70% think they are, why the need for the MGP or the PGP? Why are so many of our elderly so poverty stricken and other ordinary citizens so distressed?

The PAP Government must address imbalances in social and economic inequality, the low effective savings rates due to CPF withholdings and low wages relative to the high cost of living, unsustainable high HDB prices for very little long term legacy returns against what is an essentially depreciating asset etc.

What’s the point of a beautiful country if the people are poor? People of Singapore unite. You have nothing to lose but your chains.

This post was first published on Khush Chopra Facebook page and reproduced with permission