Lee’s first priority when he became prime minister in 1959 was to build Singapore’s economy. At that time, the city state was a swamp, with no natural resources, and it even had to import its drinking water from Malaysia.
By embracing free trade, capital growth, real meritorious education, low taxes, and a reliable judicial system, Lee raised the per capita income of his country from $US500 a year to some $US52,000 a year today. That’s 50 percent higher than that of Britain, the colonial power that ruled Singapore for 150 years. Its average annual growth rate has averaged 7 percent since the 1970s. A 2010 study showed more patents and patent applications from Singapore (population 5.6 million) than from Russia (population 140 million).
But that wealth wasn’t used, as it was by so many western politicians, to create an all consuming welfare state. Singapore is rated along with Hong Kong as one of the two most free economies in the world. Any expansion of government is gradual and grudging. However in spite of many limitations, Lee Kuan Yew managed to create a workable and prosperous state that cares for its citizens without creating Ponzi style welfare schemes or unsustainable entitlements.
Singapore’s welfare policy rests on four pillars:
1. Each generation should pay its own way.
2. Each family should pay its own way.
3. Each individual should pay his own way.
4. Only after passing through these three filters should anyone turn to the government for help. But it will be there when needed.
Singapore’s approach to the provision of health care, retirement income, and housing is in stark distinction to the corrosive dependency style policies of other countries. Singaporeans are required to make relatively high payments into savings plans from which they can later buy a home, pay tuition, and purchase a variety of insurance policies. For those under age 50, the employee contributes 20 percent of his income, and the employer 16 percent.
Singapore has what is probably one of the best functioning health systems in the world. A third of the employee’s share is put into a private Medisave account. When the balance reaches 34,100 U.S. dollars, any excess funds can be used for non-health-care purposes. All are enrolled in a catastrophic-health-care plan, although they can opt out.
Not only is Singapore’s population healthy, but the private sector dominates healthcare spending, and consumer choice keeps healthcare costs down. In Singapore, the government’s share of healthcare spending has fallen to 20 percent, down from 50 percent 30 years ago.
Singapore’s health system thrives while Western public health systems, such as Barack Obama just introduced in the US, or as run in NZ and the UK, are eventually going to collapse like all Ponzi schemes. Citizens are compelled to pay draconian taxes in order to sustain them for now, but in the UK especially, reality is hitting home with an accelerating collapse.
Lee Kuan Yew’s legacy is his method of ensuring social and financial security for Singapore’s current citizens without selfishly borrowing beyond their means and putting future generations under the threat of bankruptcy. It’s a welfare state that works, and one he always said was available to any political leader with the courage to tell his people the truth about the limits of government’s power to pass out “free” money.
Its a shame that NZ in particular never enjoyed politicians with such courage. Rather we were plagued with socialist liars who encouraged most of all a corrosive dependency upon the state that provided those charlatans with the power they lusted after but destroyed our country and left future generations loaded with debt they may never be capable of repaying.