Singapore is expected to face greater economic uncertainty and turbulence after the Covid-19 crisis, as well as longer-term trends of an ageing population and rising healthcare costs.
These challenges require the country to start thinking about how to strengthen social safety nets, and the best way to do so, said Prime Minister Lee Hsien Loong yesterday.
"The Government is not ideologically opposed to any proposed solution," added PM Lee, though he warned that the impact of such solutions has to be assessed carefully.
"We know greater challenges lie ahead. We need to do more, and we are ready to do more.
"The question is: What more will we need to do? And what's the best way to do it?" he said, speaking on the third day of the debate on the President's Address in Parliament.
Singapore's approach to solutions has always been pragmatic and empirical, with the Government making the best use of resources to meet the needs of different groups in society in a targeted manner, said the Prime Minister.
"Because if we help everyone equally, then we are not giving more help to those who need it most."
For instance, older workers, who tend to draw higher salaries than younger workers as they have stayed in the workforce longer, may have skills that are less current.
They will find it harder to find another similar job at the same pay if they lose their job. This puts them at greater risk of long-term unemployment, he added.
Solutions like unemployment insurance can offer older workers "transient relief" at best, he said.
A better approach, he added, is to retrain and upskill older workers, as it will enable employers to continue finding value in them and, in turn, they are less likely to be made redundant.
"And if the older worker does get retrenched, with these skills, he or she can find a new job more easily.
"The best unemployment insurance is, in fact, the assurance of another job," PM Lee said.
The Government's efforts, supported by unions and employers, have worked, he added, with older workers now staying in the workforce longer.
Schemes like the Workfare Income Supplement and the Progressive Wage Model, which will be extended to more sectors over time, have also made a material difference to low-wage workers, with real wages of the bottom 20 per cent growing consistently faster than wages in the mid-range, he noted. "That clearly shows that our approaches are working."
The Prime Minister said Singapore should take some time to assess the landscape after Covid-19 to see how things unfold and what specific problems develop.
"We must keep an open mind as we build and improve on the systems we have, and consider solutions that can work in our context."
While Singapore has progressively strengthened its social safety nets in the past 15 years, and rolled out schemes targeted at the lower income and those who have fallen on hard times, it found that such peacetime measures were not enough to address the needs of citizens amid the pandemic.
Thus, emergency relief measures like the Self-Employed Person Income Relief Scheme and the Covid-19 Support Grant were introduced to offer financial aid to affected groups, and these required the drawing down of past reserves to fund them.
"These are emergency measures. They are crucial for now, but they cannot continue indefinitely. We have to start thinking about what comes after them, about the level of social support we will return to, after Covid-19 is over," he added.
This work involves going beyond floating ideas such as minimum wage or unemployment insurance, said the PM.
It requires assessing their impact carefully, including looking at who wins and who loses in the workforce, and how small and medium-sized enterprises and the public will be affected by the measures.
"We must identify pragmatic solutions which will make a real and sustainable difference, and give people justified assurance that when they need help, they will get the help that is relevant to them.
"And it must not create new problems in the process, for example, by eroding our spirit of self-reliance."