Why I will never ever want Singapore to be a welfare state

From The Straits Times:

March 17, 2005

SCHROEDER'S CHALLENGE

Breaking Germany's 'entitlement culture'

By Derek Scally

Straits Times Europe Bureau

BERLIN - CHANCELLOR Gerhard Schroeder will sit down with his political opponents in Berlin today to hammer out a cross-party 'Pact for Germany' designed to end years of economic gloom.

The meeting, following a much-anticipated speech in Parliament, is seen as his last-ditch effort to turn around the country before next year's general election.

The challenge is immense: Economic reforms introduced in January have yet to have a noticeable effect; unemployment is now at a 70-year high of 5.216 million, or 12.6 per cent; domestic consumer demand is still worryingly low; and leading economists have cut their growth forecasts to as low as 0.6 per cent for the current year.

But Mr Schroeder's problems are not just economic. He is trying to break what observers call the 'entitlement culture' that runs through German society.

A judge at the constitutional court told this week of a social welfare recipient who launched a constitutional challenge because the state refused to pay for new bicycles for his children.

Other cases arose from allegedly poor hospital food or because the state would not cover the cost of shampoo during a hospital stay.

Mr Schroeder has criticised this 'culture of welfare freeloading' where even the well-off take from the state what they are entitled to, rather than what they need.

'No welfare state can afford this long term without going to ruin,' he said last autumn.

The intervening months have seen a collective belt-tightening among Germany's unemployed.

Welfare payments are now means-tested and for shorter periods. But even with tighter rules, Germany's unemployed are still entitled to a rent-free apartment as well as a television, a fridge and a washing machine - all paid for by the state on top of their social welfare payments.

The handouts go beyond social welfare recipients. Young German couples can get a 'homebuilders allowance', meaning a couple with two children who build a new home are entitled to a total of 32,720 euros (S$70,850).

The government has argued for years that the allowance, introduced to address the postwar housing shortage, has no place in a well-off country, particularly considering the depopulated areas in the east with swathes of empty housing.

Opposition conservatives have always staunchly defended the allowance, but reports suggest Mr Schroeder will today propose abolishing it, using the money saved to cut unemployment insurance contributions by 1.5 per cent.

President Horst Koehler rang the alarm bell on Tuesday, saying that Germany could no longer continue living beyond its means.

He said that the 'entitlement culture' and resistance to reform was a 'betrayal' of the postwar spirit that built Germany into an industrial giant.

'Long before anyone spoke of globalisation, Volkswagen Beetles were running everywhere in the world, and ran and ran,' he said, urging a new era of 'energy, creativity and solidarity'.

'Our total debt...is currently at 7.1 billion euros, that's 330 per cent of our gross domestic product,' he said. 'Do we finally see what a burden this is for our children and grandchildren?'

Perhaps it is easy for me to say because I have been very blessed so far and have not experienced hardship, but a welfare state is one thing I which I never ever want Singapore to become.

Some people always criticise the government for being stingy. Don't want to use surplus lah blah blah. But they fail to understand that it might be the start of a long slippery road to fiscal problems if the government starts running a deficit for any problems. A deficit is a deficit. It has to be paid back eventually. This would require either higher taxes or lower expenditure in future. "What about the huge reserves?" Well reserves are named reserves for a reason! The reserves have been accumulated through the hard work of several generations. Who are we to use it at our whim unless it is an absolute emergency? Our forefathers worked hard to accumulate the reserves. If we just anyhow use it, who is going to replace it? Our children you dick heads! There will eventually be times when we would need the reserves, but I certainly do not feel that now is the time to run deficit after deficit after deficit.

And most certainly not for spending on a welfare state like those in Continental Europe. After reading tonnes of readings on European unemployment, there is no doubt in my mind that high welfare benefits (at least those that are unconditionally given) are a key determinant of unemployment. Who the fuck is going to work hard if you can just injure yourself slightly and live off the state? In addition, it also places a huge burden on the working population. There are already fewer people working coz got more people slacking. Somemore the remaining working ppl need to pay higher taxes to support the slackers. Classic LPPL situation.

Somemore Singapore's demographic is growing older and older. This also means got lesser and lesser young people to support the elderly. If we start having a benefit system, the future generation is going to be screwed. The only sustainable way is for each generation to support itself ala CPF.

The only kind of benefit system I support is help for the unemployed. I know retraining and whatever sounds really airy fairy but I do think this is the only way out. Other countries are also undergoing restructuring. Singapore should not just complain but get down to changing things. The good old days are really over, even though that sounds damn top down lecturing. But it is the same with Europe and US, not as though Singapore leaders really useless and just anyhow crap out of their mouth.

Hmm ok, don't think I have written as well as I should have for a topic such as this. But I am feeling hot and vexed in the computer lab. Sigh...