A Brexiteer’s Fantasy : “The Singapore Model”

Tara John of CNN (Jan 27, 2019) reported the idea that may have gained traction among some Brexiteers, i.e. the “Singapore Model” – low tax, low regulation and low public spending. Boris Johnson, Michael Gove and others feel Britain can draw encouragement from the Singapore Model.

At face value, it looks exciting. But is Britain’s welfare system, where Government accounts for 40-45% of GDP, be transformed into just 16-17% of GDP? It is also not just the tax rate (of 22%) in Singapore to U.K.’s 45% tax for the top tax earners, but a raft of attractive things as observed by Sudhir Thomas Vadaketh, a Singaporean author/economist. Singapore is on a major shipping route, stability in a sea of uncertainty and has an educated and hard working population. Then there is easy access for migrants with skills. Immigration was (and is) a major issue for Brexiteers. And the other cost is human rights and free speech with a benevolent interventionist government. Will Britain do that?

The good point for Singapore is that it is ever willing to change policies for business and look forward to being a technological centre in the region. To be a “Singapore of the West”, Britain needs a fundamental shift in the following:

·       Discard the welfare system;

·       Have an interventionist government;

·       Create an environment for application research;

·       Have migrants with skills;

·       Reduce size of government to GDP;

·       Respond quickly to commercial interests and market place economics; and

·       Rely on a lower tax regime to fund public sector finances.

Is “Great” Britain willing to change its greatness?