New Singapore Shares : Social compact

The New Singapore Shares is a scheme announced by Goh Chok Tong, the then Prime Minister of Singapore, during the National Day Rally 2001 on 19 August 2001. It is part of a new social compact the government is trying to forge with Singaporeans.

Goh has called for a new social compact during the National Day Rally 2001 highlighting three key principles. The new social compact refers to a new set of principles for different parts of the society, both the government and the people, to work together for the common good of the country. The three key principles outlined include: (1) to provide heavy subsidy for housing, education and health care making them affordable to all; (2) to distribute some of the Budget surpluses back to its people during good performing years through asset-enhancement schemes and rebates; and (3) to pay specific attention to the needs of the lower-income group.

This new social compact continues to emphasise on self-reliance and family ties. In addition, an individual is urged to work and go for retraining before the government will provide support if he/she earns too little to support his/her family. The New Singapore Shares scheme is one of the initiatives taken up by the government to forge this new social compact. It allows the government to distribute part of the Budget surpluses back to Singaporeans, and to take care of the needs of the lower-income group by allocating more shares to this group.

Under the scheme, New Singapore Shares, worth S$1 each, were given to qualifying Singaporeans from 1 November 2001. These shares will earn annual tax-free dividends in the form of bonus shares at a guaranteed minimum of three per cent a year for five years starting from 1 March 2002. Bonus dividends will be declared annually in the form of bonus shares equal to the real GDP growth rate of the preceding year, provided it is a positive growth. These shares are neither transferable nor tradable. Singaporeans may cash in up to half their shares in the first 12 months before 1 November 2002. Thereafter, they can cash in their shares anytime without limits. The government will redeem all outstanding shares at S$1 each on 1 March 2007.

The total cost of the New Singapore Shares scheme is S$2.7 billion. This scheme is reported to benefit 2.1 million Singaporeans aged 21 and above. Allotment of shares is based on the individual's monthly income for the working group, while allotment for the self-employed group is determined first by the housing type and then their monthly income. Housewives, retirees and the unemployed are allotted shares based on their housing type.



Author
Joycelyn Hwang



References 
New Spore Shares: Low-income to get 7 times more than top earners. (2001, October 17). The Business Times, pp. 1, 2. 

Poor get more help in PMs new deal. (2001, August 21). The Straits Times, Home, p. 2.

S$2.7b worth of new Spore shares to be given out on Nov 1. (2001, October 13). The Business Times, p. 2.

Central Provident Fund Board. (2001). New Singapore shares. Retrieved October 15, 2003, from www.nss.gov.sg

Central Provident Fund Board. (2001). NSS media release, 16 Oct 2001. Retrieved October 15, 2003, from www.nss.gov.sg/mediareleasetext.htm

Central Provident Fund Board. (2001). Overview. Retrieved October 15, 2003, from www.nss.gov.sg/overview.htm 



The information in this article is valid as at 2001 and correct as far as we can ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.

Subject
Events>>National Campaigns
Politics and Government>>National Symbols
Ideology--Singapore
Stocks--Singapore
Economic development projects--Singapore
Law and government>>Political ideologies>>Nationalism



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