Role of public and private sectors

Many governments around the world are short sighted. They want to reduce the cost of the public sector, so they cut down on the number of people employed in the public service, such as teachers, doctors, nurses and policemen. This is ostensibly to reduce the burden on the tax-payers.

If there are insufficient people to provide the public services, relatively to the size of the population, the standard will drop, as these public employers are overworked, overstretched and overstressed. The standard of teaching, health care and public order must surely drop.

There has to be a proper balance. We need an adequate number of people to provide the public service and must be willing to pay the appropriate tax to fund these services.

If the public service is not provided adequately, the people will have to arrange for these services privately. It may be more costly and the standard may be inferior. In some countries, the residents have to engage their own security guards to look after their housing estates. They have to pay more to get private health care and education.

An adequately staffed public service also helps to create employment and put more people into useful occupations. If there is inadequate work in the productive occupations, the excess manpower may be channeled into unproductive work, such as the speculative activities in the financial sector and marketing of investment scams.

There is no need for the public sector to crowd out the private sector. They can co-exist. The public sector can provide for the needs of the lower and middle income groups. The higher income groups can pay more to get private health care, education or other services. They can get personal and better quality attention, but they pay more. The public sector will be around to offer a choice and keep a reasonable limit on the charges of the private sector.

Singapore used to have a good balance between the public and private sector. I hope that we can go back to the good old days.

Tan Kin Lian