Procreate or else – “Enormous” problems?

Published by The Online Citizen on August 13, 2012

By Leong Sze Hian

I refer to the reports “”Enormous” problems if Singaporeans don’t procreate: Lee Kuan Yew”and “Govt reviewing Marriage and Parenthood package” (Channel NewsAsia, Aug 12).

Oh no! Not another more foreigners or else!

The former report states that

““So our choice is simple. Either accept migrants at the rate at which we can assimilate them and make them conform to our values and have others on temporary work permit holders to help build up Singapore and improve,” said Mr Lee.

But for the longer term, what’s important is to have a change in mindset.

This is yet like another consistent rhetoric that we must have foreigners now and in the immediate future, in order for Singapore to continue to grow and prosper.

This may be an erroneous premise. Why?

Norway vs Singapore

Since Norway has often been cited as a country to compare with, let’s look at some statistics about Norway.

Norway‘s success has been achieved by growing the population by just about 0.5 million from 2001 to 2011, against Singapore’s from 4.1 to 5.2 million.

Norway also did not have to depend on a huge infux of foreigners and foreign labour.

Norway’s Total Fertility Rate (TFR) at 1.88 in 2011, is one of the highest in Europe, against Singapore’s all-time low of about 1.1 now.

Why procreation policies not working?

The latter CNA report cited above may give us some clues as to why our procreation strategies may not be working.

Low wages

“The government is also working to help Singaporeans stay employed and ensure that wages keep pace.”

Mr Teo Chee Hean said about 400,000 Singaporeans benefit from the Workfare Income Supplement of up to $2,800 a year.

The scheme helps to top up the wages of low-income workers by up to 25 per cent – Norway’s median monthly disposable salary (after tax) is 3,306 Euro (S$5,057), against Singapore’s $3,249 (before tax) for full-time employed residents.

However, it’s not just the median wage, but the fact that there are so many low-wage workers in Singapore – since 400,000 Singaporeans age 35 and above get Workfare, how many low-wage workers are there in total if we include those below age 35?

With such low wages, some Singaporeans may be afraid to have children.

Fear of unemployment

As to “The world economy is still weak, but with more jobs created in Singapore in the second quarter of this year, overall unemployment remains low at 2 per cent”, why are we still talking about the overall unemployment rate? Shouldn’t we be referring to the Singaporeans’ unemployment rate which is at 3.1 per cent?

Also, it’s not just the unemployment rate, but the type of jobs and wages that low-wage Singaporeans are getting.

With regard to “The National Trades Union Congress (NTUC) also promotes upskilling and retraining to help Singaporeans stay in or find jobs” – According to the Department of Statistics’ Monthly Digest of Statistics Singapore June 2012,

Job Seekers attended to by the Community Development Councils (CDCs) and e2i, was 99,608
and 100,504, in 2010 and 2011, respectively.

Job Seekers Placed in Employment was 17,732 and 14,223, respectively.

This works out to a declining placement rate of 18 and 14 per cent, respectively.

The above may indicate that it may be harder to get a job, with only 14 out of 100 job
seekers being placed in employment.

GST Voucher helps procreation?

In respect of “This year, the government introduced the GST Voucher to help the lower-income groups offset the Goods and Services Tax. The GST Voucher includes cash, utilities rebates and Medisave top-ups” – We should keep in mind that the original purpose of the GST offset scheme was to help lower-income families pay for the GST when it was introduced.

For example, even a lower-income family spending just $1,000 a month, would incur GST of $840 a year.

So, the maximum GST Voucher cash payment of $250, will only cover 30 per cent of the GST that they incur.

Also, for this year, there are no Service and Conservancy Fee (S&CC) rebates, rental rebates or Senior Citizens’ Bonus.

According to the Department of Statistics, the Electricity Tariff price index increased by 40 per cent from 2009 to May 2012.

Since the GSTV-U Save rebate range between $180 – $260 a year, I would like to suggest that in determining this quantum, consideration be given to the electricity tariff increase as well as the GST increase.

For example, a household with a monthly utility bill of $150 in 2009, may be paying around $210 now after the 40 per cent increase.

So, the GSTV-U Save rebate of say $220 a year, would only offset about 31 per cent of the $720 annual increase.

Longest work hours in the world

Singaporeans also have the longest work hours per week in the world.

Procreation incentives favour the higher-income?

There are too many procreation incentives that discriminate against lower-income Singaporeans, like the parenthood tax rebate, working mother’s child relief, qualifying child relief, matching grant for child development account, etc.

There are also discriminatory policies against unmarried single mothers, housing policies that are disadvantageous to divorced parents, etc.

Why not just give the same benefits to parents, regardless of their income? After all, I understand that more than 60 per cent of Singaporeans do not or hardly pay any income tax, which obviously includes the low-income earners.

The notion that giving more financial incentives to the higher income and educated may be “statistically” flawed. Statistics have always indicated that the lower-income and lower-educated are the ones who tend to procreate more.

If you are lower-income, the benefits may make a world of difference. But, if you are highly paid, how much more motivation is there for you to procreate by dangling more financial incentives?

Childcare and kindergarten subsidies never seem to be able to catch up with increasing childcare, kindergarten fees and related costs.

GDP spending on procreation

How much does Singapore spend on procreation benefits and family support as a percentage of GDP?

I understand that Singapore’s, at about half a per cent of GDP, pales in comparison to countries like Sweden and Germany’s at about 3 and 2.8 per cent, respectively.

About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.