Spending increased a lot, but you pay much more?

Piggy bank in the hands of the doctor.Piggy bank in the hands of the doctor.

Have you ever wondered as to why despite the consistent rhetoric that we have been increasing spending by a lot and will spend even more, but you always end up paying a lot more also?

For example:

… Healthcare – “the total budget for the Ministry of Health (MOH) in 2010 was $4 billion. In this year’s Budget, Mr Heng allocated it $10 billion.

A jump of another $3 billion by 2020 would mean that in 10 years, the health budget will climb to more than three times its 2010 level”

– according to the Aon report – “Through the early part of this decade, Singapore was a market characterised by high levels of medical inflation. Harking back to 2014, Singapore had a medical inflation rate of 20 percent, double the regional average. It declined to 15 percent in the years 2015–2016 with the encouraging estimate that in 2017 it will fall below double digits to 9.5 percent before climbing to 10.9 percent in 2018”.

On a relative basis, after adjusting for purchasing power parity (PPP) – is Singapore’s healthcare costs the highest among all the countries in the report?

… HDB – we lose billions on HDB as the more flats we sell, the more money we lose

– we have the most expensive public housing in the world (ratio of price to income)?

… Education

“It will double spending on the pre-school sector to $1.7 billion by 2022 and open 40,000 more childcare places by then”

“Annual spending on pre-schools, which was $360 million in 2012, has more than doubled to $840 million this year. It will double further to $1.7 billion in 2022”

– In this connection- I refer to the article “My First Skool raises fees – are parents paying too much?” (Straits Times, Jan 25).

It states that “My First Skool, the NTUC-run childcare/infantcare centre and preschool, one of Singapore biggest chains, has raised their school fees yet again, sending new parents into a panic.

The fee increase will be between $6 and $33 a month for childcare and $5 and $20 for infantcare.

Up to $34 a month more may not sound like much at first glance.

But take into account the fact that My First Skool has been increasing their school fees every year from 2014-2016.

In 2013, it was announced that My First Skool would raise fees in 2014 by up to $32.10, as well as remove the sibling discount extended to parents with more than one child enrolled.

In 2015, they once again increased childcare and infantcare fees by an average of $32 a month.

2016 saw yet another fee hike, of an average of $34 per month for childcare and $14 for infantcare.

To put things into perspective, My First Skool’s monthly fees for childcare are currently $712.21 to $770.40 a month, while infantcare fees are $1,356.78 to $1,364.25 for Singaporeans.

Why is it that despite a 133 per cent ($840 divided by $360 million) increase in pre-school spending, from 2012 to 2017 – childcare fees keep going up by so much?

Does it not seem to be somewhat paradoxical that we always end up paying so much more, despite increased spending by a lot?

Leong Sze Hian

About the Author

Leong
Leong Sze Hian has served as 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), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.