Singapore’s economy has registered dramatic growth in the last half century. This expansion has, however, come at a cost. It has been steered by the People’s Action Party (PAP), the current government, which pays scant regard to democracy and the rights of Singaporeans. Because of this, problems have been emerging. Income inequality, a highly stressed workforce, the absence of a significant number of local entrepreneurs, our reputation as a tax haven, and the unhappiness of the local populace with the influx of foreign labour have raised questions about the sustainability of the country’s current economic model.
The Singapore Democratic Party (SDP) has drawn up an alternative economic programme to chart a different course for our economy. Our programme emphasises fairness and promotes equality and equal opportunity for all. The programme is people-centric and has as its prime objective the well-being and happiness of Singaporeans. It is also an alternative that is both realistic and sustainable.
While the current government clings to policies that help the elite get richer while “sticking its spurs” into workers’ sides to make us work “cheaper, better and faster” as our ministers have expressed, the SDP’s vision is to create an economic system that benefits all Singaporeans, one that makes our society more egalitarian by tapping on the people’s natural talents and innovation.
Our alternative seeks to level up society. We need a system that works for the people, not vice versa. Material gain must result in collective social good. Gain for its own sake can be destructive to social processes and to a community. And social good can only come about when people are consulted and included in the decision-making process, and when community bonds are strengthened.
At a glance, this is the SDP’s plan:
Reduce GST and eliminate it for essentials such as food and medicine. The GST is by its nature a regressive tax as it penalizes the poor who spend a far higher proportion of their income as compared to the wealthy. At a time of global inflation, the decision to raise the GST from 7 to 9% is very hard to understand. At the same time, when things had stabilized, our Finance Minister proposed a budget for the current Financial Year with a $6 billion surplus. This is far in excess of the extra GST collected. No rationale was given for taxing the people so far in excess of the services provided by the government. In many countries, food essentials such as bread, rice, milk and cooking oil together with primary care healthcare services are exempt from GST. This ensures that no additional burdens are placed on the public just to build up the government coffers.
Address the rising cost of living: In addition to reducing the GST which will put a considerable amount of money into the pockets of Singaporeans, we also propose reducing rents which are well within the ability of the government since it owns around 90% of the land in Singapore. In addition, there are a number of indirect taxes such as vehicle Certificates of Entitlement, water and utilities taxes etc which add to the burden of Small and Medium Enterprises (SMEs) and are often passed on to consumers. The government’s current approach is to provide periodic handouts and vouchers. This may provide temporary relief and a cushion at best, and not address structural issues. Even worse, giving out vouchers can negatively affect the confidence and self esteem of the average workers in Singapore, making them feel beholden to the government for continued handouts. Instead of being encouraged to use their own creativity and innovation to start small businesses, they are being channelled to repeated voucher schemes which appear and disappear apparently at the whims of the government.
Redefine economic progress. We at the SDP propose an alternative indicator of economic progress. The PAP almost exclusively relies on Gross Domestic Product (GDP) growth and the set of metrics has an undue emphasis on production and consumption. This is why the PAP government allowed unfettered access for foreigners, leading to overcrowding, burdening the infrastructure, and driving inflation, no thanks to a growth-at-all-cost policy. The problem is that GDP is an insufficient—and even misleading—indicator when the cost (social, environmental and financial) of production is not taken into account. With an alternative index, such as the Genuine Progress Indicator (GPI), that comprehensively measures the cost and benefit of economic growth, we can better gauge the efficacy of our policies. Research has shown that this more accurately reflects citizen wellbeing and the health of a society. With our proposal , the quality of life and overall happiness of our citizens will be the guiding basis for economic growth.
Reduce income inequality. As Singapore’s GDP growth rate rises, so has income inequality and poverty in the country especially if all workers in our country are taken into account including the underemployed and migrant workers. To ensure that workers are not exploited, we propose the legislation of a national minimum wage. This is something not new and was in fact in the PAP election manifesto in 1959 when they were still a democratic socialist party. The Progressive Wage Model is a good start but it does not recognize the realities on the ground where perpetual training is often not possible for some professions and not all workers are covered.
Provide retrenchment insurance for workers who are involuntarily unemployed. Retrenchment insurance paid out of an individual’s CPF savings should be introduced to provide retrenched workers with support while they look for re-employment. While the government has recently (15 April 2025) () introduced a Jobseeker Support Scheme, it is extremely complex and limited in the support provided, capping out at a total of $6000 over six months, with the payout diminishing over the months. Our proposal goes one step further than the diminishing support by providing genuine relief while being sustainable as it does not tap on the reserves but rather builds up a pool from worker’s CPF contributions.
Encourage entrepreneurship. Our workers’ productivity has been stagnating over the years. First, our society ought to be free and open so that innovation can thrive. Workers must be intrinsically motivated; only this will ensure that they excel in whatever they do and add value to the goods and services they produce. We also aim to cut down on importing foreign PMETs whose main talent is the ability to work at the same jobs for lower salaries. This will help ensure that employers employ Singaporeans first and avoid exploitation of foreigners. Only when local talent cannot be found should foreigners be employed.
Eliminate GLCs, increase SMEs. We aim to encourage enterprise by divesting inefficient government-linked companies (GLCs), which are competing with and slowing down the growth of our SMEs, of their untouchable status. One effective way to help local SMEs grow is to reduce land costs and rentals. We will also work towards weaning our economy off its addiction to multinational corporations (MNCs).
Remake the GIC/Temasek model. Singapore’s reserves are, effectively, kept with the government through the Government of Singapore Investment Corporation (GIC) and Temasek Holdings (TH). These entities are currently being run in a less than transparent manner. The SDP believes that our country’s reserves should work for the people, not the other way around. TH should be eliminated and the GIC’s operations must be made transparent and its accounts made public. This is in line with best practices in other first world sovereign wealth funds such as the Norwegian The GIC must be restructured to function independently of the ruling party—no member of parliament or their relatives should hold decision making or compensated positions in the company.
Increase social spending. We recommend allocating more resources to help the most vulnerable segments of our society. Evidence from Singapore research has shown that unconditional cash assistance for the poorest of our poor must increase in order to reduce poverty, address major gaps especially in child support and improve wellbeing of individuals The SDP Recognizes the value of the Silver support scheme but would favour a much broader scheme which assists 80% of low income elderly with $500 a month to supplement their CPF. This could be funded out of a very small portion of the interest income on the investments of the reserves. It reflects the values of our people in recognizing the hard work of our parents and grandparents who have been the actual people building up our country and not just the political leaders who have not been shy about taking the credit for our success.
Abolish the CPF Minimum Sum Scheme. Retirees depend on their Central Provident Fund (CPF) savings to meet living expenses. Withholding their savings through the Minimum Sum Scheme is not only impractical but also immoral. The scheme must be abolished and the money returned to members when they retire. Those who want to keep their money in the CPF to enjoy the guaranteed rate of return should be free to do so. The changes in CPF policies must be kept to a minimum. Last year, many of us were disappointed to find that our Special Accounts would disappear once we reach the age of 55. For those of us who had planned our retirements meticulously around the previously guaranteed higher interest rates for the funds in the Special Account, there is always the prospect that the CPF policies could yet change arbitrarily again.
Empower workers. Beyond a certain level, no amount of coercion can bring about higher-quality output and productivity. We must empower our workers and upgrade their minds and attitudes by returning them their freedom; it is when they feel a sense of belonging to society that they will be motivated to contribute more than what is asked of them.
We from the SDP believe that Singapore needs a refreshed and enlightened economic model that will take us into a new era of sustainable growth—not consigning our workers to a cycle of working harder and longer for less and less; one that uplifts our people instead of dumbing them down; and one whose priority is the well-being of all Singaporeans, not just the rich. Only then can we be truly respected on the international stage.
