Wednesday, February 13, 2013

Time For A National Defence Duty

In my speech in the White Paper debate, I said that one of the things we need to do going forward is to create sharper distinctions between Singaporeans and others who live or do business here. I had not mentioned any specific proposals as I did not want them lost in the wider debate. I offer one now.

The National Defence Duty

I propose levying a National Defence Duty on PRs and foreigners living in Singapore. I should make clear that it is not my intention to add to any xenophobic hysteria. As I will explain, my proposal addresses a current imbalance.

We know the sacrifice all Singaporean males make, spending two years of their lives doing National Service, and doing reservist training for several years after that. It is a sacrifice not just of blood, sweat and tears. There is also a significant economic cost we pay - two years of our lives, at the time when we are about the join the work-force or enter university; perpetually two years behind our female peers in terms of pay, experience and job opportunities; two years behind in the property ladder and therefore having to pay higher prices; less attractive to employers because of reservist commitments. This has more pronounced disadvantages for poorer families. At the time when their sons reach a working age and ready to contribute to the families' finances, they spend two years earning a modest allowance. They cannot even work part-time to supplement the family income.
I believe the majority of us accept this as something we must do for the good of Singapore. And having a strong armed forces, with a significant reserve force, has no doubt contributed to the security and growth of Singapore. The same is true of having strong police and civil defence forces.
The thing is everyone living in Singapore benefits from this sacrifice - including PRs and foreigners. We cannot expect equal treatment as it is unrealistic and unworkable to have foreigners do National Service. And while we can impose National Service obligations on PRs, there is practically little we can do if they leave Singapore before enlistment, never to return.

My proposal is therefore a simple one. All PRs and foreigners must pay additional income and property tax to be called a National Defence Duty. In short, we do duty, they pay a duty.
The rationale is simple - since PRs and foreigners cannot contribute manpower to our SAF and Home Team, they make a financial contribution to the protection and preservation of their lives, families, jobs, investments and properties.

Those who have sons who are liable for NS will be exempted. Those who send their sons away before enlistment will have to pay back- taxes and penalties, over and above the bond which is forfeited. Likewise, those who give up their PR status. This should take care of what I think is a current anomaly. When PR parents send their sons away before enlistment, it is the son who is penalized in terms of not being able to return. I think this is too small a price to pay. More importantly, the decision would have been made by the parents. They should pay a cost for that decision. Paying back-taxes and penalties is a fair solution. The PR parents may of course decide to leave Singapore for good without paying. But such a move would be a real cost to them as well as that would mean ending their careers or businesses here. They are not likely to take that decision lightly.

The National Service Trust

However, the revenue earned should not simply go the general state coffers. There should be a real and direct benefit to National Servicemen.
I therefore propose that the revenue earned be placed in a National Service Trust. The trust funds can be used to supplement the allowance of NSFs from poor families. It should compensate NS men who have been injured in the line of duty. It can even provide an income for a period of time to families of NS men who have been killed. That will never compensate for their loss, but it may make a real and tangible difference to families who have been deprived of their father's or son's contributions. It will also give confidence to our NS men that should anything happen to them in their training, their families will be taken care of. If there are sufficient funds, we can even offer a grant to NS men towards their first homes, and address the inequity I spoke of earlier of NS men entering the market later than their peers.

Will this proposal cause PRs and foreigners to flee our shores? I doubt it. Even with an increase, our tax rates will still be among the lowest of developed countries, and we will still be one of the more attractive places to live and work in.
Taxation is not a fool-proof way of addressing this thorny issue, but at the very least, it ensures that everyone contributes to the defence and security of Singapore. Beside, I believe that if foreigners and PRs see that their financial contributions directly benefit NS men, they will view the duty as less of a penalty, and more of an opportunity to make a meaningful contribution towards the security they enjoy thanks to our NS men. A chance to do their duty, as it were.

I intend to raise this proposal in the coming Budget debates. I would be grateful for your views, and any suggestions you may have to improve it.

Thanks for reading.

1 comment:

  1. Dear Mr Kumar,
    It is an interesting and "out of the box" view to address an ongoing trend of PR's opting out their children from NS and to create a "sharper distinction" as you mentioned.
    To take this discussion to the next step , why dont we pause for a moment and think of the idea and benefit a second generation PR brings to Singapore when he does NS ?
    Does he do it with the same Patriotic feeling that a Singaporean would have in him ?
    Does he do it to avoid the $$ that his parents would have to otherwise incur to breakaway ?
    Can he really contribute with mind and spirit to Singapore when there is a need or crisis and he is called for to serve the nation ?
    When I put these questions to my mind , the answers come as a NO. But that is just a personal opinion.
    Then why are we still contemplating subtle distinctions ?
    If the tangible long term benefit of PR's doing national service is indeed low or neglegible why not create the sharper distinction upfront.
    So the choice for foreign immigration - in any form is an informed choice.
    E.g - If one choose's to be a PR with his family , there will be no NS for the second generation but there will be a sharper and higher categorization for all facilities the State provides - Housing, Healthcare, Education , Taxation (still competitive as a benchmark) etc.
    This would atleast make the transaction transparent and fair to both parties plus to the citizens who are most affected and aggrieved by this issue.
    I know that the differentiation exists , but am not sure if its as "Sharp" as it ought to be. Nor am I proposing a plan to sharpen it as this needs to be a well thought out long term proposal addressing all stakeholder concerns , the States concern, the citizen's concern and the immigrant parties concerns.
    Introduction of taxes / levies or other measure's are ok, but do they really reflect a true solution to the ongoing trend or is it a reactive measure that is being contemplated ?
    Once again, I would like to thank you for your thoughts and the gesture of bringing this topic into a bigger pool for conducive feedback.