Oct 18, 2012

The 1% welfare state

According to this report,

The Improbable Resilience of Singapore | Solutions: (By John Richardson, Elizabeth Ong)

"Organisation for Economic Co-operation and Development (OECD) countries, ... in 2001 expended more than 13 percent of GDP on welfare, while Singapore expended less than 1 percent."

Current democracies practise extreme taxation, where 100% of every citizen's rightful citizen-ownership income is taxed away. In many democracies, a large part of this taxation gets back to citizens as welfare.

Singapore is a rare case where the "welfare" comes from the citizens' own private money, as described:

"Singapore’s alternative was the Central Provident Fund (CPF), a program of government-mandated savings over which workers had control and which was intended for retirement and home ownership. Like Singapore’s health care system, the CPF system places maximum emphasis on individual discretion, individual responsibility, and the operation of market mechanisms to influence user choices."

The CPF is money contributed by employees and employers, with accounts kept individually for each employee. The money belongs to employees. The CPF also encourages people to use their money in their CPF accounts to buy medical insurance for their relatives.

The use of citizens' private money for government planned "welfare" is also seen in the government's healthcare solution in 2012.

In response to rising healthcare cost, the prime minister of Singapore, Lee Hsien Loong, has this solution: increase Medisave. "We've increased the Medisave contributions and I think, when next we have a chance, we should push the Medisave contribution up a little bit more." Medisave is a healthcare insurance paid by employees. In short, in response to rising healthcare cost, more of the employees' private money will be used.

The improbable resilience of Singaporeans.

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