DECISION ON GST
Singapore’s decisions on public finance, for instance, have been different from other countries, Mr Lee noted.
“In many countries, politicians are more than happy to promise higher subsidies or increase social spending,” he said. “But funding these expenses is a different matter altogether.”
As a result, these countries run up deficits, which grow over time and get out of hand.
Singapore is not immune to political pressures to spend more or tax less, said Mr Lee.
“But successive generations of ministers knew that avoiding the problem and running a deficit would be irresponsible, because it would simply pass the burden to future generations,” he added.
“Instead, we did the opposite. We were prudent with our spending, saving a little bit every year, and by investing these savings wisely, we gradually built up our reserves.”
But to be lean and efficient requires discipline on the part of political leaders, as well as a first-class public service that can come up with policies, implement them well and deliver good results, Mr Lee said.
It also requires some difficult political decisions to raise taxes when needed, he added.
Mr Lee gave the example of how Singapore implemented a Goods and Services Tax (GST) hike from 7 per cent to 9 per cent.
He said the government had known “for quite a while” that a GST increase would be needed at some point, in particular, to fund more healthcare services to support Singapore’s rapidly ageing population.
Honest and consistent public messaging was “crucial” – the issue was raised several times in the 2011 and 2015 General Election campaigns, before it was announced in the 2018 Budget that the increase would happen after the next General Election.
This was a political decision, said Mr Lee.
“We knew it would cost the ruling party some votes, but we felt strongly that we needed to be responsible and upfront with voters,” he said.
“It was important that people voted fully informed about the upcoming increase, so that we maintain their trust and support.”
Alongside schemes to help cushion the GST hike, a political decision was also made to split the increase into two steps – 7 to 8 per cent in 2023 and 8 to 9 per cent in 2024.
“I highly doubt that the public service on its own would have preferred such a two-step increase,” said Mr Lee, citing how administrative procedures would have to be doubled.
But making the increase in two steps would acknowledge the public’s concerns about the tax increase, he noted.
“It would show that the government recognised that conditions had not fully returned to normal, and it was doing what it could to give people more time to adjust to a more gradual hike,” he added.
“I can say, in all good conscience, that the government has done the right thing, and in a way which minimises the pain and maximises the acceptance of the change.”
THE PUBLIC SERVICE MISSION
Mr Lee said the political leadership and the public service will also need to work closely on a range of other issues such as public transport, immigration and income inequality.
“Each will need to do its part, so that together the political leadership and the public service can come up with good policies, persuade Singaporeans to support them, and make the policies succeed, and, if I may say so, therefore enable our politics to succeed,” he added.
Mr Lee said that to ensure that the government functions this way for “as long as we can”, it will depend on maintaining and renewing a high-quality political leadership.
The public service, on its part, plays a major role in “keeping Singapore exceptional”.
Addressing public service leaders, Mr Lee said: “You have to set the tone and direction in your respective organisations, and show your colleagues and subordinates by personal example what the public service stands for.
“While you can look forward to good careers in the public service, I am sure you appreciate that this is much more than just a job or a career.”
Unlike working in the private sector or a commercial organisation, the public service has a mission to serve Singapore and Singaporeans.
“The public service must always be driven by and committed to that mission,” Mr Lee said.
TRIBUTE TO MR LEE
In his speech at the event, head of Civil Service Leo Yip noted that this was the first event of the public service that Mr Lee had attended since handing over the premiership to Prime Minister Lawrence Wong in May.
It was therefore apt to begin his speech with a tribute to Mr Lee, he added.
He said: “Your leadership truly exemplified what public service is about and set a good example to all of us. You taught us what it meant to put Singapore above everything else.
“You exemplified integrity. Your call to us remains clear – to uphold the highest standards of integrity because it is essential to building trust with the citizens that we serve.
“Thank you for leading us with clarity, courage, and conviction.”
