Tan Kin Lian's Blog: A more caring community

Saturday, January 02, 2010

A more caring community

We live in a community. Are we prepared to stand by and watch the weaker members of our society, including their children, go hungry or had a hard life? Or, do we want to help them, so that they also can have the hope of a better future?

Most people are generous and kind in nature, and will want to play a part to help the poor and the weak. This is where charity comes in, but there is also a selfish reason - if others have a decent life, there is no need to resort to theft or crime, and there is no need to have many criminals put into jail (which is also costly).

Mostly, people are poor as they do not get adequate wage and the cost of living is high. They will get into financial difficulty, if someone in the family falls sick and has to incur expensive medical bills. They may lose their savings through bad investments, or have been cheated by investment scams.

Some people are poor due to gambling, drinking and other vices - but they do not represent the majority of the poor. We can leave aside this problem for a separate discussion.

In a competitive world, we all have to work and compete hard to make sure that our business succeed. However, we have to balance competition with compassion. We should not push competition to the extreme, to the extent that other people (who may not be so smart as us) gets employed and helpless.

The European societies have a more proper balance in their lives. They pay adequate wages, have a shorter working hours and more holidays. They may be less competitive globally but they give a better quality of life to their people. They pay higher taxes, so that the ordinary people have better health care and old age pension. They may not be very rich, but they have better distribution of income and are a more caring community.

Recently, the Economist magazine carried out an online debate. 80% of the voters (probably from around the world) voted in favor of the European system of having more holidays. Many people feel that the competitive world force them to work too hard.

I prefer the European system (especially Scandinavia) of higher taxes, more social benefits, less working hours and a more caring community.

Tan Kin Lian

5 comments:

Tan Kin Lian said...: Many people think that low taxes is better. But, low taxes means less public services, e.g. insufficient investigators to look for cheats and scams, prevent theft and crime, and higher charges for health service.

It is better to pay higher taxes and get highly subsided or free health care, education, environment health and public safety.

This will work out to be cheaper for the people over the long term. It is also fairer, as the cost is borne more by the high income earners.; January 02, 2010 3:12 PM
Garrett said...: True, but socialized healthcare has its disadvantages. Because of aging population, socialized medicine is not sustainable. Like a ponzi, it will collapse eventually. There is also the issue of the old citizens being "denied" healthcare through indirect means (long treatment wait times, stalling tactics, etc.), because from a system standpoint the faster the old and sick people die, the better off the system will be. Contrast this to the USA that has a less socialized healthcare with Europe, while USA has a much higher health expenses for the individual citizen, they receive a higher quality of healthcare (cancer survival rates are much higher in the USA than the Eurozone). Socialized healthcare also means you life (literally) depends on the government and their policies, because at any time they can reduce or even cut the benefits. Imagine if you have been planning your finances for retirement with the assumption that you get socialized healthcare. What happens when you retire this policy gets axed? How can you leave such an important part of your life to the government? Government cannot be trusted to act in the interest of the citizens.; January 02, 2010 4:00 PM
Garrett said...: In addition to my previous point, IRONICALLY I think the Singapore healthcare system is probably one of the better ones in the world. I am familiar with the current US health care system, and I can say it is not as good as ours.

Singapore works on a two tier health insurance system. A basic tier of medishield for everyone. An optional tier of a private H&S plan is available to people.

One way to make the current system even better is to make basic medishield FREE for all citizens, coming from taxpayer money. That way even the poorest of citizens can get access to free, albeit lousier quality healthcare in the B1 and C wards. Richer citizens also help support the poor citizens by proving *BASIC* healthcare services.

Those that are financially better off can purchase the private H&S plan that gives them coverage for even private hospitals. As long as people (1) purchase it when they are young, (2) purchase the rider to cap the amount of medical expenses per year, (3) pay premium regularly... I think it is extremely hard for one to go broke from medical expenses. With the best H&S plan now, the cap is only $3k/yr. So even if you must in and out of hospital for 10 yrs in a row, you only need to fork out $30k. Still manageable.

Problem comes when people are financially uneducated, like relying on their employer shield plan that might not be transferable when they are retrenched, or being penny wise and pound foolish and thinking they will wait till an older age to purchase health insurance coverage. For those people, they have only themselves to blame.

Anyway my post only concerns healthcare. I'm sure socialized nations are better off in many other aspects, but just not in healthcare in my opinion.; January 02, 2010 4:08 PM
Garrett said...: On the aspect of finances (investment, insurance & retirement), I agree with you Mr Tan that Singapore has still A LOT to learn. The system now is broke and useless. I would say that whatever financial regulatory agencies are impotent in this country. Sadly, this problem is fixable with a few strong legislation (and this country is good at implementing whatever laws they want).

Investment:
1) Ban all Unit Trust (and their equivalents) that have an expense ratio of >1.0%. It's a fact that the expense ratio of the majority of investment instruments in this country is atrocious.
2) Ban the selling of all actively managed funds. Wishful thinking, but this will save a lot of broken hearts in the long run.
3) Introduce heavy taxation on dividends and capital gains of stocks and maybe bonds, but at the same time introduce ways for one to do tax-sheltered investments (similar to what the US does). This will dissuade speculators from buying and selling regularly. And for those that insist to gamble it will make them go broke faster, and hopefully it also means they will learn their lessons earlier.

Insurance:
1) Ban tied insurance agents.
2) Make it a law that financial advisers (and make this include anyone that sell insurance products) has a fiduciary duty to their clients. If the adviser misrepresents products, churns products, etc... make it punishable by law, maybe a $100k fine would be good :)

Charity:
1) Have regular independent audits of all charity organizations. Make sure that at least say 90cts of every $1 dollar of donation goes to payout the poor folks. This way excessive admin costs in the form of bloated salaries used to purchase gold plated toilet bowls can be avoided.; January 02, 2010 4:22 PM
Anonymous said...: US is trying to reform its healthcare programmes. The world is constantly changing; there is no such THE Best healthcare programme.; January 02, 2010 6:46 PM