Thursday, June 25, 2015

Benefits to be provided free to citizens

When a person join a club as a member, he or she has to pay a monthly or annual subscription and will be entitled to the benefits provided by the club. They may include free use of certain facilities of the club and to pay a reduced fee for the use of other facilities or to dine at the restaurant.

The same concept can be applied when a person becomes a citizen of Singapore. The citizen and his family is entitled to the use of certain public services free and to other services at a reduced rate or at cost. There is a need to prevent abuse of some free benefits by over consumption of the benefits. To prevent his abuse, a charge may be imposed.

Some services cannot be over consumed, for example, security, basic education or medical consultation. Most people will only use them out of necessity, rather than for "enjoyment". There is no need to charge for the use of these public services.

It does not make sense for the government to charge a fee for basic education. It is costly and unproductive to collect the small amount of fee from the students and to take action against poor students who are not able to pay the fee. The collection of the fees takes the time of the teachers which adds to their stress and work load.

Similarly, it is not necessary to collect fee for essential medical consultation. As the government already pays for a large part of the cost of these services, it is unproductive and wasteful to add to the cost by asking the patient to make a small payment. There are better ways to prevent the abuse, for example, by asking the patient to pay in full for the use of services in excess of a quota. As most people will use the services within the quota, it will reduce the administrative work of collecting the small fee. It also saves time of the patients in queuing to pay the fee.

Beyond the free services, there is a need for the government to charge for the use of other services which are discretionary and considered as non essential. The government can provide these services and give the benefit to the citizens of lower cost through bulk purchase of the services and control on over charging. The services that fall within this category include tertiary education and specialist health care.

The government can provide this services to a certain proportion (for example, 50 percent) of the total demand and allow the private sector to meet the rest of the demand. The citizens are willing to pay a higher price in the private sector to have shorter waiting time or better service. The prices set by the government for similar services will be useful to serve as a benchmark on the prices set in the private sector.

The current system used in Singapore of providing different levels of subsidies for the consumption of health services according to the income level of the family is troublesome and inefficient. A better way is to provide a direct monthly grant to people at the lower income level to be credited into a stored value card or restricted or open bank account.  The holder can use the money from the government to pay for the use of services at the normal charges applicable to citizens.


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