http://sg.news.yahoo.com/pm-lee--the-greatest-danger-for-singapore.html?utm_source=dlvr.it&utm_medium=twitter
“If we are content to just be above average in the league of cities, we will fail. That is the greatest danger if we tell ourselves to slow down, enjoy life today and not worry about tomorrow,” he said.
Instead PM Lee said that now more than ever, in the face of growing competition and the lessons from the US and Europe, Singapore could not afford to be less competitive.
"Being near the front also means we must have a successful, growing economy. There is no other way we can achieve this. We cannot do it by spending what we have inherited from the older generation. We certainly cannot do it by pumping oil or gas from the ground," he said.
"We can only do it if our economy is prospering and creating wealth that we can invest in our city and our people, to make life better for all of us," he added.
He painted a grim picture of a Singapore with slow growth -- new investments will be fewer, good jobs will be scarcer and unemployment will be higher.
Singapore would also face a brain drain when enterprising and talented Singaporeans were lured away by more lucrative opportunities and incomes in more competitive cities. In such a scenario, the low-income workers will be hardest hit, he said.
Responding to critics who say not enough is done for the underprivileged, PM Lee said "the reality is that we do much more than we acknowledged or get credit for."
"We have equipped people with the skills and ability to do well for themselves... Over a lifetime, a low-income household will receive more than S$500,000 from the government," he said.
"In fact, households in the lowest income quintile (20 per cent) have on average more than S$200,000 of equity in their HDB flat! This is the direct result of government policy and government grants. It is unmatched by any other country," he added.
PM Lee also said emulating countries with similar population sizes and pro-welfare policies such as Norway or Denmark would not work.
"We face a fundamental choice as a society -- do we want low taxes and targeted welfare benefits; or high taxes on all and comprehensive welfare? Singapore has chosen the first; the Scandinavians the second," he said.
Explaining that such countries are rich in natural resources, have relatively homogeneous societies and are situated in a peaceful and affluent continent that serves as their hinterland, PM Lee said these countries are willing to pay high taxes in exchange for high social protections for all.
While Singapore's personal income tax rate for the very wealthy stands at 20 per cent, those in similar tax brackets in Scandinavia pay anywhere from 40 to 57 per cent, according to data from the Ministry of Finance and Organisation for Economic Co-operation and Development (OECD).
"I do not believe that Singaporeans would be willing to pay the taxes that Scandinavians pay, or that our economy could be competitive at such heavy tax rates," said PM Lee.
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