Singapore’s next PM set for policy speech as inflation anxiety grows

SINGAPORE Deputy Prime Minister Lawrence Wong on Tuesday said the city-state needs to refresh its social compact and address income and wealth inequality amid mounting anxiety over being left behind in an increasingly complex world economy.

Speaking in his most significant policy speech since being tapped as next-in-line to lead the nation, Wong said Singapore had expected a strong recovery from the pandemic, “but have flown into strong headwinds.” He cited the war in Ukraine, and worsening competition between the US and China.

Pushing for greater equality among Singaporeans, Wong said the country should collectively determine its future, including “how much more the government should spend — and on what.” He also said Singapore will strengthen its progressive system of taxes “so that everyone contributes something, but those with more contribute more.”

“I hope to see a society and system that benefits many, not a few; that rewards a wide variety of talents, not a conventional or narrow few; that values and celebrates all individuals for who they are and what they can achieve; and provides all with opportunities to do better throughout their lives,” he said.

Wong, who is also Finance Minister, was chosen as the leader of the Singapore government’s so-called fourth generation team in mid-April, paving the way for him to become the country’s next prime minister. Wong said last month he intends to “refresh” Singapore’s social compact and develop a “Forward Singapore” agenda that will set out a “road map for the next decade and beyond.”

Frustration over surging inflation, which is at its highest level in more than a decade, has prompted growing unhappiness in the city-state. A majority of locals indicated in a May poll by Blackbox Research Pte. that they thought the government was doing badly on handling price rises.

Officials in the city-state have moved to stem anger at the rich in Singapore, with Wong announcing in his first budget in February plans to raise taxes on the wealthy, as well as property and cars. Still, top politicians including Prime Minister Lee Hsien Loong have said that the city also risks losing out to other hubs seeking to woo wealthy foreigners if they go too far in penalizing the wealthy.

Singapore last week joined governments across the world in trying to protect those most vulnerable to surging costs of living, announcing a S$1.5 billion ($1.1 billion) package to help lower-income households. Price growth picked up for a third month in May to its fastest pace in almost 14 years.

Prime Minister Lee has said Singapore must prepare for more economic challenges as inflation will remain high and central banks are tightening policies, warning that the world may face a recession within the next two years. — Bloomberg