"City of Possibilities; Home for All" - NDR 2007
http://www.channelnewsasia.com/ndp07/rally_video.htm
Singapore Government Press Release
Media Relations Division, Ministry of Information, Communications and the Arts,
MICA Building, 140 Hill Street, 2nd Storey, Singapore 179369
Tel: 6837-9666
NDR 2007
City of Possibilities; Home for All
1. Introduction
2. Income Gap – leaving no one behind
3. Upgrading Education – levelling up society
4. Ageing Population – living active lives
5. Working Longer – more savings for old age
6. Improving CPF – building a nest egg
7. Upgrading & Renewal – best home for all
8. Forging Ahead – go for it together
Introduction
1. Singapore is on the move
a. Things are looking good
b. Growing buzz and confidence
c. Overall outlook is positive
2. External environment favourable
a. Optimism all over Asia
b. Recent turbulence in global financial markets
i. May affect economies in US and Europe, and also Asia, over the next 3-6 months
ii. But fundamentals for Asia remain strong
c. ASEAN countries are benefiting from a strong Asia and high energy prices
i. Singapore has taken over as Chairman of ASEAN
ii. Focus on making ASEAN stronger and more integrated
iii. So that ASEAN countries can keep pace with China and India, and not be left behind
d. Relations with Malaysia and Indonesia are good
i. Cooperating in many areas, on win-win basis
ii. Some outstanding issues with both countries
iii. But will deal with the issues in the broader context of our overall relationship
3. Singaporeans are all over Asia and the world
a. Southeast Asia, India, China, Middle East, Central Asia, even Mongolia and Brazil!
b. This is the way to thrive in a globalised world
4. But must secure our home base
a. Create the conditions for Singapore to grow
b. Give every citizen a stake in the country’s success
c. Create a sense of security and hope
d. Build a nation which we can all draw strength from
e. A home base from which to venture forth and seize opportunities around us
5. This means adapting and changing, again and again, as the world around us changes
a. Changes to make our economy vibrant and competitive
i. This is what we have been doing
(1) Restructuring the economy
(2) Reforming taxes – lower income taxes, higher GST
(3) Developing the IRs and remaking our city
b. Changes to strengthen our social cohesion
i. To draw us closer together despite the tidal pull of external forces
ii. So that we are not divided between different races and religions, rich and poor, or winners and losers
iii. So that Singapore stays a home where we all belong
6. This is how we can sustain our exceptional performance
a. Tackle difficult problems that come our way
b. Move forward as a nation
7. Tonight, focus on one major challenge ahead – widening income gap
a. Discuss related issues – education, ageing population, and housing
Income Gap
1. We know why income gap is widening – globalisation, technology, and cut-throat competition
a. This is the way the world is going, and Singapore will be carried along
b. Lower end
i. Hundreds of millions of unskilled workers in China, India and Vietnam entering the workforce, and holding down wages
ii. Our workers are feeling it too
c. Middle and higher end
i. IT automating simple jobs
ii. Knowledge economy putting premium on education and skills
iii. Demand for people with skills to do what computers and robots cannot do
iv. Each extra year of schooling – 14% increase in wages
v. Increase is even higher for university education
d. At the very top, fierce competition
i. In sports, you want to watch Tiger Woods play golf, or Roger Federer play tennis
ii. If a company is hiring a CEO, they try hard to get the best candidate, not one who is almost as good
iii. If you need legal advice, you want to hire the best lawyer to fight your case
iv. Winner takes all – top incomes zooming up
(1) Tiger Woods earns US$100 million a year (prizes and endorsements), much more than the No 2 (Jim Furyk)
(2) Widening gap between the best and the rest
e. Income gap is also linked to the ageing population
i. Many of the poor are likely to be elderly
ii. Those who do not provide enough for old age will face difficulties in retirement
2. What can we do?
a. First overall strategy is to grow the economy
i. Generate more resources to help those in need
b. Ageing – very difficult problem with no easy solutions
i. Will talk more about this later
c. For the lower-end
i. Emphasise training, skills upgrading and job redesign
(1) Raise the productivity of low-income workers
(2) Help them to earn better pay
(3) This is what NTUC is doing
ii. Plus Workfare
d. For those at the top – good that they are doing well
i. Can’t hold down their incomes, or levy higher income taxes
(1) Talent will leave
(2) Our economy will lose vitality
(3) Many others will suffer
(4) We are prospering now because we have brought income taxes down, welcomed talent, and attracted businesses to thrive here
ii. But those who have succeeded must show that they care for their fellow citizens, e.g. through philanthropy
(1) Happening in the US
(2) Here too – many Singaporeans are donating generously to good causes, e.g.
(a) Universities
(i) NUS, NTU and SMU receive endowments to fund many projects; they have nearly 80 endowed professorships
(ii) Major donations
[1] Lee Kong Chian School of Business in SMU
[2] Yong Loo Lin School of Medicine in NUS
(b) Hospitals
(i) Tan Tock Seng
(ii) Khoo Teck Puat
(c) Sim Wong Hoo
(3) More people should do this, according to your means, and from your heart
(4) Collectively, these individual responses make our society more cohesive and compassionate
e. For the vast majority in the middle
i. Our policies must enable them to do well, and provide them with many opportunities to move ahead
ii. One major strategy is HDB home ownership
(1) Best form of social welfare for Singaporeans
(2) Give everyone a stake in the nation’s success
(3) Have some new plans, which I will elaborate later
iii. Another is education
(1) Rising payoffs on education
(2) Hence best way to level up our society
Upgrading Education
1. Our aim is to give every child a top-rate education
Schools
2. Hence emphasis on quality of all neighbourhood schools
a. A high base in all schools
b. But each developing its own special area of excellence
c. MOE has worked hard at this
i. More freedom for principals and teachers to experiment
ii. More resources for schools with good ideas
iii. More Opportunity Funds for needy students
iv. Teach Less Learn More
d. At first, sceptics asked: how to teach less and still learn more?
i. But can see it happening now
ii. Tremendous energies and enthusiasm in many schools
3. Visited schools to see for myself
a. Jurong Secondary School in Taman Jurong
i. Students do DVD – Digit,, , al Video and Drama
ii. Make use of digital video in language classes
(1) e.g. Chinese Language teacher assigned students read to a novel during their holidays – “The Little Prince”
(2) Students wrote a script based on the novel
(3) Acted it out with a “blue screen” background
(4) Recorded it on video
(5) Class watched performance, then interviewed the actors in their roles and discussed what they had learnt
iii. I spent two hours in the school
(1) They interviewed me on camera too!
iv. Before I left, presented me a DVD of my visit
b. Mayflower Primary School in Ang Mo Kio
i. Focussed not just on grades, but also character, moral values, and social skills
(1) Students work in groups
(2) Desks in classrooms arranged in clusters, not rows
(3) Involving parent volunteers actively
ii. Teachers are full of spirit and passion
(1) Committed to teaching every child
(2) Have conviction and pride in what they are doing
(3) Several with school-age children have their own kids in Mayflower
iii. Could see the difference in the children
(1) Asked teachers whether they could get pupils to speak up in class
(2) Greatly cheered by reply: “the problem is how to stop them speaking!” (Solution: appoint “Noise Managers”)
iv. Put up a full scale musical – Our Time to Shine
(1) I saw them rehearsing
(2) Seng Han Thong attended musical, and emailed me
(3) I had said in the National Day Message that we will have a new Singapore, with its own unique identity and can-do and never-say-die spirit
(4) This reminded him of the musical
(5) Quote him:
“It was by our very own Ang Mo Kio heartland neighbourhood school, Mayflower Primary School, that has the same spirit of "can-do and never say die." I felt very proud to see many of our Ang Mo Kio little boys and girls performing confidently on the stage. … They acted professionally, they sang happily and they danced gracefully.
“I turned my head back and encountered many familiar faces. These are the parents and grandparents who might not believe that one day their children and grandchildren could perform so well on the big stage. I saw smiling and proud faces all around.
“It was indeed an occasion that made one realise that Singapore is a City of Possibilities.”
c. Many more exciting things happening in schools all across Singapore
4. This is our fundamental approach to uplift all Singaporeans
a. Whichever school you go to, whatever home background you come from, we will help you develop your talents to the fullest
b. Provide many ladders to success, and help you climb up as high as you can
5. All this depends on a high-quality teaching force
a. Good teachers, principals, MOE staff, dedicated and passionate about teaching
b. This is what we have, and what our future depends on
c. Invited a few here tonight to represent all 28,000 teachers in Singapore
d. Please stand
e. We salute you
Malay Language
6. Cover one aspect of our school education – language skills
a. Many older Singaporeans can understand and speak Malay and Bahasa Indonesia, including non-Malays
b. But too few in the younger generation
c. Need more people to be familiar with the language – may not be totally fluent, but can chit-chat and understand the gist without translation
i. Then we can interact with our neighbours in their language
ii. Work together on opportunities, and deal with issues which arise from time to time
7. Emphasise
a. No change in mother tongue policy
b. But must encourage more non-Malays to learn Malay in addition to their mother tongue
8. Two initiatives in secondary schools
a. The Malay Special Programme (MSP) – to study Malay as 3rd language – but not very popular
i. Introduce incentives to encourage more students to take up MSP, including bonus points for JC admission
ii. Similarly, extend incentives to non-Chinese students who take Chinese as 3rd language
b. Introduce a Regional Studies Programme in a few secondary schools
i. Offer scholarships for this Programme – 100 per year
ii. Students will do Malay as 3rd language, and learn about our Southeast Asian neighbours
iii. Good if one school can offer Bahasa Indonesia
Universities
9. Beyond schools, aim to get every student into post-secondary education, and as many as possible into tertiary institutions
a. We have invested heavily in ITE, polytechnics and universities
i. Increased intakes over the years
ii. More students progressing from ITE to poly, and from poly to university
b. With good schools
i. More students want to go to university
ii. This year, many fretted over university admissions
iii. Not really because of dragon babies
iv. Universities increased the number of places more than proportionately
v. But more students are applying, and anxieties persist
c. Also many polytechnic graduates hope to go on to get a degree
i. 15% now proceed to NUS/NTU/SMU
ii. More getting degrees by other routes, including many who go abroad
10. Should expand university places, but make sure students get a good education and are equipped with valuable skills
a. Some countries have produced large numbers of graduates without regard for quality or employment opportunities
b. They face big problems – graduates are unemployed, or underemployed
11. Today, 23% of every cohort receive subsidised education in the three universities (NTU, NUS and SMU)
a. Aim for 30% of Singaporean cohort in publicly-funded universities by 2015
b. This means 2,400 more places each year
12. This also means a 4th publicly-funded university
a. Existing universities are already rather large; should not expand them further
b. Develop a new institution with its own character and unique strengths, different from NUS, NTU and SMU
c. May not limit ourselves to just one new institution
i. Could open more than one route
13. Lui Tuck Yew will chair a committee to study how we will expand the university sector
a. Dr Tony Tan will be advisor to the Committee
b. Will decide within a year on the best way to proceed
14. With these changes in our schools and in higher education, Singaporeans can look forward to:
a. More opportunities to receive a first-class education
b. More pathways to success
Ageing Population
1. One factor in the widening income gap is our ageing population
2. Singapore has one of the fastest ageing populations in the world
a. Not enough babies
b. Singaporeans are living longer
i. Conversation with Father Michael Arro, Parish Priest at the Church of St Teresa
(1) He came from France 50 years ago
(2) Then his parishioners retired at 55, and he held funeral services for them around 60 – 5 years
(3) Now, people retire at 62, and live longer to around 80 – around 20 years of retirement!
ii. Father Arro was spot on
(1) In 1957, average life expectancy was 61
(2) Today, average life expectancy is 80
(3) Many will live longer, e.g. to 90, or 100 and beyond
(a) 9,000 Singaporeans over 90 years old
(b) Of these, 500 Singaporeans are over 100!
(i) e.g. 110-year-old Teresa Hsu – featured on CNA programme (“The New Old”)
(ii) She is not the oldest
(4) Also saw retired Prof Ann Wee (81) on the programme
(a) Described herself as OPWA (Old Person With Attitude)
(b) Said she aimed for a “rectangular life”
(c) Happy and meaningful life for as long as you live
(d) When the time comes, let it be quick and painless
(5) Aim not to live forever, but to have a good life, and a good death
(a) What Hokkiens call “ho see” (好死)
(6) Japanese have the same philosophy
(a) Seek three major components of a happy life: “ample eating, leisurely sleeping, and sudden death”
(b) Special temples where people go to pray this – “pokkuri dera” (temples blessing longevity and painless death)
c. What will Singapore be like in 2020?
i. Visited Radin Mas – Sam Tan’s ward
(1) 17% of residents (1 in 6) are aged 65 and above
(2) Singapore as a whole will be close to this proportion by 2020
ii. Show you some photos
(1) Met many senior citizens
(a) Celebrating birthday together
(2) Staying active
(a) RC helps to bring them together
(b) Not just to exercise
(c) Also to socialise and keep in touch
(3) Sam Tan started “Project Golden Service”
(a) Help them to pick up skills, do something meaningful and earn some pocket money
(b) Some are good at calligraphy
(c) Others give haircuts
(d) This 67 year old makes fancy ketupats
(e) One group of women (in their late 70s) get together every weekend to chat and sew quilts
(4) Chatted with these two ladies
(a) Mdm Ng Sock Cheng, 68
(i) Old resident of mine in Teck Ghee
(ii) Had a spine operation and was wheelchair-bound
(iii) Joined a religious group, made friends, chants and meditates daily
(iv) Regained her strength and now walking again
(v) Said “I have something to look forward to, chatting with my friends, thinking of new things to do, all the time getting stronger”
(vi) She asked me: her CPF runs out this year. What will happen after that?
(vii) Have some ideas to make the CPF last longer – will talk about this later
(b) Mdm Lee Siew Lan
(i) 91, but still working as a cleaner in Redhill Market
(ii) Introduced by the hawkers to the cleaning contractor (courtesy of NTUC’s job re-design programme)
(iii) Officially earns $800, but she moonlights helping out hawkers
(iv) Fiercely independent. She said: “When people give me free things, I don’t accept. Why, when I can afford to pay? But if they say OK, you are a friend, we give you a discount, then I think ‘OK, friends can accept kindness’”
(5) Also met Mdm Loke Tai Hoe, 89, retired samsui woman (Slide 8)
(a) Here chatting with Tuck Yew
(b) Came to Singapore at age 18, and worked till she was 79
(c) Brought up 10 children
(d) Husband has passed away, now lives with four unmarried children
(6) As Singaporeans grow older, need more help
(a) In Radin Mas, flats are fitted for elderly living
(b) VWO downstairs
(c) Social workers and RC volunteers visit the old folks regularly and help to look after them
(d) All the old folks are very grateful – many told me about “德教” – Thye Hua Kwan Moral Society
(7) Happy to see that they are active, healthy, and cared for by the community
(a) But worried that more and more elderly are living by themselves
(b) Best solution is still the family
(i) Stay with children
(ii) Or at least have children staying nearby who visit them regularly
3. Radin Mas is a glimpse of our future
a. All wards have senior citizens like these
b. Radin Mas has more, but not the oldest ward – Kreta Ayer-Kim Seng in Jalan Besar GRC even older – 25% (or 1 in 4) above 65!
c. By 2020, all of us will have a lot more white hair
d. Whole society will need to make many adjustments
4. Government is seized with this issue
a. Lim Boon Heng is working on it full time
b. Talked about this in Chinese earlier
c. One important aspect – savings for old age
5. REACH recently did a consultation exercise on Active Ageing
a. Two thorny issues consistently came up
i. Employment opportunities for older workers, i.e. working longer
ii. Having sufficient funds for old age, i.e. CPF savings
b. Will focus on these
Working Longer
1. Best way to have enough savings during old age – stay employed and work longer
a. With longer lifespans, countries around the world like the US, UK, Japan are trying to get their people to work longer and receive state pensions later, in their late 60s
b. We too have to make this adjustment
i. Do not expect all Singaporeans to work till their 80s and 90s like Mdm Lee and Mdm Loke
ii. But to retire at 55 or even at 62 is too early
iii. Lim Swee Say (coming back from the US) told me:
“During a walkabout, I talked to a resident at the market. He was healthy looking.
(1) LSS: How old are you?
(2) Resident: 72.
(3) LSS: Wow. You are looking healthy for your age. Are you still working?
(4) Resident: No. I retired a long time ago, when I was 55.
(5) LSS: 55! Why did you retire so young?
(6) Resident: Because I didn’t know I was going to live so long!”
c. How to get more people in their 60s working?
i. Discussed with union leaders
ii. This is their foremost concern
iii. Workers themselves want to continue working, which is a tremendous plus
iv. But need to enable more to do this
d. How? Three ways:
i. Education
ii. Legislation
iii. Financial Incentives
2. Education
a. Changing mindsets for both employers and workers
b. Employers must recognise the value of older workers
i. Deploy them effectively, to make the most of their abilities and strengths
ii. e.g. SBS Transit using retired bus drivers as Service Mentors to guide new drivers
c. Workers must adjust too – be prepared to change gears after 62
i. Accept lower pay and lighter work
ii. Accept lower appointments so younger ones can move up
iii. e.g. SingPower Senior Technicians retiring and being re-employed as Technicians
d. Have spoken about this before, and so will not say much tonight
3. Legislation
a. Clear signal to employers and the public that we are serious
b. Some ask – why not just pass a law to raise the retirement age?
i. Experience shows this will not solve the problem
ii. Legal retirement age now 62
(1) But only 2/3 of men are still working up to 62
(2) 1/3 have stopped earlier, despite legal retirement age
(3) Many women stop working even earlier
iii. Simply raising retirement age beyond 62 may discourage employers from hiring older workers
c. Better approach – legislate for re-employment to continue working beyond 62
i. More flexible for both employers and employees
(1) Not necessarily the same job
(2) Not necessarily the same pay
ii. Does not mean that every worker will definitely get a job
(1) But employer must make an offer
(2) Take into account worker’s performance, health and preferences, and company’s needs
(3) In most cases on an annual basis
(4) Both sides work out a win-win arrangement
iii. This is what the Japanese have done, after long preparation
d. We will do this
i. We will pass law to take effect from 2012
ii. Require employers to offer re-employment to workers reaching retirement age, i.e. 62
(1) First step – up to 65
(2) Later, push this up to 67
4. Financial Incentives
a. Government will provide incentives for older people to work, and for employers to hire them
b. Workfare Income Supplement (WIS)
i. One important tool to achieve this
ii. Already tilted in favour of older workers
(1) Starts at 35 – ¾ of the benefit
(2) Above 45 – full benefit
iii. Further higher tiers for older workers in their 50s and 60s to strengthen incentive
iv. Had planned to do this when we review the Workfare scheme in a few years
(1) But better not wait
(2) Will move now
(3) Make a strong push to get people working
c. Will introduce higher tiers of Workfare for older workers – above 55
i. Up to double the payout for younger workers
ii. Currently, a worker aged 60 earning $1,000 gets $100 a month from WIS (actually $1,200 a year), or 10% of salary
iii. Under revised scheme, will double this to $200 a month, or 20% of salary
d. Will make a big difference
i. More take-home pay and more CPF
ii. Encourage older workers to be re-employed
iii. Encourage employers to hire older workers, instead of replacing them by younger ones or foreign workers
5. These are proposals from the unions and Tripartite Committee on Employability of Older Workers, chaired by Gan Kim Yong
a. Good ideas that we are implementing
b. Raise employment rates for older Singaporeans, and help them to save more for old age
Improving CPF
1. CPF – underpins our social security system
a. Good system that has served us well
b. Funded by contributions from both workers and employers, not out of taxes
c. Meets three key needs
i. Housing
ii. Retirement income
iii. Medical care
d. But CPF system has to be adjusted and brought up to date
i. When CPF started, life expectancy was 61
ii. Now it is 80
e. Three changes:
i. Improve the returns on CPF savings
ii. Draw down your CPF savings later so that they last longer
iii. Cover risk of living longer than expected
Improving Returns
2. First question – how to increase returns on CPF savings?
a. CPF pays interest – currently 2.5% for Ordinary Account (OA), and 4.0% for Special, Medisave and Retirement Accounts (SMRA)
b. Like a savings account in the bank, but better
c. Totally risk-free – balances guaranteed by Government
d. Returns sometimes lower than buying shares, but not like buying shares, where you can make big or lose big (like recently)
e. Those who want higher returns and accept higher risks can invest their money themselves, through the CPF Investment Scheme (CPFIS)
3. Our main focus is to help the lower- and middle-income groups
a. Many have modest balances
b. Half of active CPF accounts are below $45,000
i. Active means people who are working and contributing
ii. Includes younger workers just starting to save
iii. Older workers will have higher balances
c. Unwise to encourage these members to invest on their own in stocks, shares etc
i. Do not have enough savings
ii. Do not have expertise
iii. Should not expose themselves to excessive risks
iv. In fact, many who have invested on their own have not done well
4. Solution
a. Enhance existing risk-free framework
b. CPFB will pay higher interest, up to a cap
i. 1 percentage point more
(1) On first $20,000 in your Ordinary Account
(2) And on up to a total of $60,000 on your combined Accounts (i.e. OA + SMRA)
ii. More than half the active members will get 1% more on all their balances
iii. You can still use the $60,000 for housing or medical expenses
iv. But not to take out to invest on your own (through CPFIS)
c. Beyond $60,000, maintain status quo
i. If you have this much, you should be able to look after yourself
ii. Can invest money yourself through the CPFIS
5. This 1% more will make a big difference
a. A young man who starts work today at 21, earns $1,700 per month, and buys a 4R HDB flat, will earn about $20,000 more interest at 55
b. i.e. one-quarter more interest than before
c. Cost Government $700 mn a year initially, and the amount will grow in future as members save more in their CPF
d. A lot of money – equal to the entire government grant to the HDB every year ($750 mn)
e. Done our sums carefully to make sure it is a reasonable rate to pay on CPF balances, and which the government can afford
f. Right thing to do, to help low- and middle-income Singaporeans save enough for old age
6. Reassurance to those who own or plan to purchase HDB flats – no change to concessionary HDB loan rate formula
Delaying Drawdown
7. Second question – how to make CPF savings last for member’s life expectancy?
a. Currently at age 55
i. Set aside Minimum Sum
ii. Settled this in the last round of CPF changes
iii. No change
b. Age 62
i. Start to draw down from Minimum Sum and collect your monthly payments for up to 20 years
ii. This is the Draw-Down Age (or DDA) for the Minimum Sum
c. Recall problem that Mdm Ng faces
i. Even with higher interest, if we start drawing down CPF too early, the money will run out too soon
ii. If we start later, the Minimum Sum will last longer
iii. If you defer draw down by 1 year, you will earn more interest and the money will last 2 years longer (20 years later)
d. 62 + 20 = 82
i. But many people will live beyond 82 – more than half, especially women!
ii. Hence need to raise DDA
8. We are legislating for re-employment till 65, and pushing hard to get more people working into their 60s
a. Must raise the DDA to match
9. Will raise DDA progressively
a. Re-employment till 65 starts in 2012
b. Correspondingly start raising the DDA in 2012
c. Raise progressively year by year
d. Reach 65 by 2018
e. Then Minimum Sum will last till you are 65 + 20 = 85, which is better
10. Impact on age groups
a. Those nearing 62 (58 and above) – not affected
b. Those slightly younger – DDA goes up just a little
c. Those not approaching 62 yet (53 and below) – DDA goes up to 65
d. Press will carry the details tomorrow
11. I know this is not so popular
a. ST survey – everybody wanted higher CPF returns, wanted to work longer, was worried about saving enough for retirement, but few wanted to delay the DDA!
b. But we have no choice – people living longer, we must work longer, and start drawing on our savings later
c. Hence must start moving now
12. Government will give something extra to help older workers affected by this deferment of the DDA (those in their 50s)
a. Pay one-off bonus interest into their CPF RAs – a “D-Bonus” (Deferment Bonus)
b. Also bonus for those who voluntarily defer their DDA, even if they are 58 and above – a “V-Bonus” (Voluntary Deferment Bonus”)
c. Will give details later
Annuities
13. Third question – what if you live longer than expected?
a. Risk that your CPF will run out – “longevity risk”
b. Problem lessened when DDA goes to 65, and Minimum Sum lasts till 85
i. But many will still live beyond 85
c. Other pension schemes face the same problem
i. One solution is annuities
(1) Pay lump sum to the insurance company
(2) Get a monthly payment for the rest of your life, however long you live
ii. e.g. Switzerland
(1) Individual savings up to 65
(2) Then convert to a compulsory annuity
14. CPF allows annuities too
a. Can convert Minimum Sum to an annuity
b. But voluntary, not compulsory
c. Few people take it up
i. Singaporeans do not quite understand annuities, or the need for them
ii. Returns are not very attractive
d. But we still need annuities
15. Will make some form of annuity compulsory for CPF members
a. Will apply to those now below 50
b. We will study, consult industry, educate CPF members, and work out a detailed scheme
Summary of CPF Changes
16. Three major changes to the CPF:
a. Higher CPF interest – 1% more on first $60,000
b. Later DDA – from 62 to 65
c. Compulsory annuities – for those now below 50
17. Have outlined the key points
a. Omitted many details
b. Ng Eng Hen will make full presentation in Parliament in September
18. Changes will bring our CPF system up to date, but will not solve problem for all time
a. Have to continually update the system, with changing needs and demographic trends
b. In particular we will need to go beyond 65
i. Both for reemployment, and for DDA
ii. After we get to 65, will review situation
iii. And move to 67 once we are ready
c. If we make these changes in good time, Singaporeans can have peace of mind in their golden years
Upgrading & Renewal
1. Besides CPF savings, housing is another major policy
a. Both to narrow income gap
b. And to build a nest-egg for old age
c. When economy grows, values of flats go up
d. When Government has surpluses, we can upgrade your flats, neighbourhoods and new towns
2. Three aspects to consider
a. Front-end – buy the flat
b. In the middle – enhance the value of the flat
c. Tail-end – monetise the flat for old age
d. We have policies for each part
3. At the front-end
a. Give more help to lower-income to buy HDB flats
b. Introduced Additional CPF Housing Grant last year
c. Will enhance it further
i. Grant is now up to $20,000
(1) Increase to $30,000
(2) A lot, compared to 3-room flat posted price of $120,000
ii. Also raise household income ceiling
(1) Now limit is $3,000
(2) Raise to $4,000
(3) Cover about half of all households in Singapore
4. At the tail-end
a. Make it easier to monetise the flats
b. Especially for those in 2R or 3R flats who have only had one bite of the cherry
c. For this group, the Government will help them to unlock the value of their flats
i. Right now, can sell the flat and move to a studio apartment with 30-year lease
ii. Introduce new scheme – HDB will buy back the tail end of the lease on your flat, and leave you with a shorter lease of 30 years on the same flat
iii. Payout in two parts
(1) Lump sum upfront
(2) Monthly payments for the rest of your life (i.e. a form of annuity)
iv. Scheme is for those aged 62 and above
v. 30-year lease should be sufficient, but working out some arrangement if you live longer
vi. MND is studying this
5. Today, focus on the middle part – enhancing the value of your home through upgrading and estate renewal
a. We have many upgrading programmes
i. Most popular – Lift Upgrading Programme (LUP)
ii. Made this a priority, especially with our ageing population
iii. Will complete LUP by 2014
b. Also have schemes for private estates
i. e.g. Estate Upgrading Programme (EUP) for major upgrading works
ii. But private estates sometimes still feel neglected
iii. Lim Hwee Hua chaired a committee to see what we can do
(1) Revamp the EUP to bring together and coordinate all the works we are doing
(2) Give private estates Community Improvement Project Committee (CIPC) funds like HDB estates, to carry out smaller scale but more timely enhancements
(3) Hwee Hua will provide further details
c. But most Singaporeans live in public housing, and this is HDB’s mission
i. Continually finding ways to improve and meet new needs and expectations
ii. From Toa Payoh to Ang Mo Kio, Bishan, Pasir Ris and Sengkang
iii. Each new estate an improvement over the previous one
New Estates
6. Next new housing development – Punggol
a. Started Punggol 21 in 1998
i. Slowed down due to the financial crisis
ii. But now demand is picking up again
iii. Time to get things back on track
iv. Used the time to upgrade the plan – Punggol 21+
7. Show satellite image of Singapore
a. Zoom into Punggol
b. Dam up the river mouths of Sungei Punggol and Sungei Serangoon to create two reservoirs
c. Create a waterway to link the two reservoirs
d. Build the town starting from the Town Centre, and then extending along both sides of the waterway
e. Fly in for a closer look
f. Best flats are those with a river view
i. View from inside a flat
ii. View from outside – gardens everywhere including on rooftops
g. Town centre by the waterfront
i. Malls, retail outlets, F&B, even al-fresco dinning by the water
8. Punggol 21+ will take some years to build
a. But can already see something coming up upstream along Sungei Punggol
i. New Anchorvale Community Club in Sengkang
ii. Co-located with a sports and recreation centre – 4 swimming pools, indoors sports hall, and football field
iii. Will be built by the end of the year
iv. Also a floating island nearby, part of MEWR/PUB’s ABC Waters programme
9. This is how Punggol 21+ will look like
a. Many things to do all around the coastline
b. Water activities, e.g. canoeing and kayaking
c. Cycle or jog all along the coastal promenade
d. Chilli crabs at the old Punggol Point
10. Punggol 21+ is the face of the new Singapore
a. City with fun and buzz (in Punggol, and downtown with the IRs)
b. Retaining our present image of a clean, green and safe island
c. Important that we do not lose our present brand recognition as we acquire new attributes
Old Estates
11. Old estates also have great potential
a. We are already redeveloping selected sites within these estates
b. But where we can clear a large piece of land, we can do more to transform the whole area
c. e.g. Dawson Estate in Queenstown
i. Show you where it is on the satellite picture
(1) Queenstown MRT
(2) Completed SERS project – Forfar Heights (Strathmore Ave)
(3) New flats – Clarence Ville (Tanglin Road)
ii. A lot of open space to develop 10,000 HDB and private flats
(1) Start with three HDB precincts
(2) Alexandra Canal
(a) Decked over it
(b) Building a new linear park on top
iii. Show you some pictures
(1) Linear park
(2) Invited award-winning local architectural firms to design the flats
(a) Flats integrated with one end of the park
(b) Precinct at the other end
iv. Quite a contrast to the old SIT flats
v. But will preserve some old landmarks in the area
(1) Old wet market along Commonwealth Avenue
(2) Old town centre square nearby
vi. Merge them into the new development
(1) Retain the memories and character
(2) There will be something extra about the place
Middle-aged Estates
12. Neither new nor old, but middle-aged estates
a. Two key programmes to upgrade these estates – MUP and IUP
i. We have been doing since 1990 – going on for 17 years
ii. Many residents have benefited
iii. Time to upgrade the upgrading programme!
b. Grace Fu has been chairing the Forum on HDB Heartware
i. Received many ideas and requests
ii. We now have improved versions of our upgrading programmes
c. Replace IUP with the Neighbourhood Renewal Programme (NRP)
i. IUP was for individual precincts
ii. NRP will combine two or more precincts
iii. Bigger area and larger scale – can plan more and better facilities
iv. Will still have standard items, e.g. BBQ pits, community gardens, covered walkways, reflexology footpaths etc
v. But now can also consider non-standard items
(1) e.g. street soccer court
(2) e.g. skating park
(a) Already have them in Bedok and Orchard – very popular
(b) Will be quite a thrill for the young people
vi. But up to residents to decide what items you want
(1) We will call a Town Hall meeting, and get the residents involved
(2) You decide what you want for your own communities
d. For individual flats, will replace the MUP with a new Home Improvement Programme (HIP)
i. Feedback from focus groups
(1) Most popular requests are for practical improvements within the flat
(2) Fix spalling concrete on ceilings
(3) Upgrade toilets and bathrooms
(4) Replace entrance doors and grille gates
ii. With the HIP, you will get all of these improvements
e. All of these upgrading programmes cover many flats
i. They will be in housing estates all over Singapore
ii. Show you how they all fit together
iii. These are the HDB townships all over Singapore
(1) For flats built up to 1980, 100,000 have already benefited from MUP – blue dots (one dot per precinct)
(2) Another 100,000 have not yet benefited, and will now enjoy the HIP – light blue dots
(3) Extend the HIP to slightly younger flats
(a) Many flats built between 1981 and 1986
(i) Peak period – HDB built 50,000 flats in some years
(ii) QC was not so good
(iii) It has been 25 years
(iv) Some are starting to show signs of wear and tear
(b) We will extend the HIP to these flats
(c) They will also enjoy the NRP
(d) Another 200,000 flats eligible, or one-quarter of the total flats in Singapore – red dots
(e) Five main clusters – Jurong East, Bukit Batok, Yishun, Hougang, Tampines
(f) Choose two towns to pilot the HIP – Yishun and Tampines
(4) Extend the NRP to even younger flats
(a) Those built between 1987 and 1989
(b) Another 60,000 flats eligible – green dots
iv. Effect of all this
(1) Nearly all estates in Singapore will be covered
(2) There will be something for everyone
v. Some areas have no dots
(1) These are new flats built since the 1990s, e.g. Northern part of Chua Chu Kang, Sembawang, Punggol, Sengkang and Pasir Ris
(2) No need for upgrading yet
(3) But your turn will come
(4) Provided Singapore continues to grow and we have the resources to continue these programmes
13. How will our estates look like after all the upgrading?
a. HDB made a video clip
b. New look of public housing
i. First-class living environment
ii. Homes set with greenery and water
iii. Draw our communities closer together
iv. Foster a sense of belonging
c. No other city in the world has this
i. Public housing that is attractive, affordable and appealing
ii. A quality home for every citizen
iii. Assets that appreciate in value, and help provide for old age
d. We can do it in Singapore
i. Provided we make the effort and work hard together
ii. Systematically upgrade and renew our homes
iii. Remake our entire city
iv. Will take us 20 or 30 years
v. Eventually, the whole country will be transformed
14. Acknowledge:
a. HDB
b. Animation by Nanyang Polytechnic, School of Interactive and Digital Media
Conclusion – Forging Ahead
1. Focussed tonight on the widening income gap, and especially ageing
a. Explained major strategies to tackle it
i. Upgrading education
ii. Working longer
iii. Improving CPF
iv. Upgrading and renewing our housing estates
b. Brought them together tonight, so that Singaporeans understand the whole picture
2. These are difficult challenges, but we have worked out solutions for each one
3. Strength lies in our people
a. Dedicated workers and capable leaders
b. Not just individual stars, or a small group at the top
c. But a cohesive society and a strong Singapore Team
i. Each giving his best for the nation
ii. Doing things together that none of us could have achieved on our own
iii. This is our greatest asset
iv. This is the secret of our success
4. We are all set to surge ahead
a. After SARS, estimated Singapore’s sustainable growth at 3-5%
b. MTI has reviewed this in the light of last few years
c. Raised the growth estimate to 4-6% for the next 5-10 years
d. At our stage of development, this is an ambitious target
e. But we can do it provided we continue to adapt, stay open, and ride the wave
f. Then we will grow with the whole of Asia, and not just based on what is physically in this island
5. For the next few years, conditions are favourable
a. We should strive to do better than the long-term estimate of 4-6%
6. Wind is filling our sails
a. Let’s catch the wind
b. Set the course ahead
c. Go for it
7. Last year, our sailors at the Asian Games in Doha won 5 gold medals
a. Watched final keelboat match against India
b. Both teams used identical boats, but Singapore won
c. What made the difference?
i. Our people – 5-man crew of Justin Wong, Renfred and Roy Tay, Ivan Tan and skipper Teo Wee Chin
ii. Their abilities and skills
iii. Their training and teamwork
iv. Their determination and will – never giving up, thinking coolly under pressure, battling tenaciously and finally prevailing
8. This is the Singapore spirit which will see us through as we remake our nation and build our home
a. Whatever the challenges, we will tackle them one by one, and sail through
b. Over the next decade, we have a unique opportunity to transform Singapore
c. Together, let us make this truly a City of Possibilities, and a home for all of us
ANNEX TO 2007 NATIONAL DAY RALLY
CHANGES TO DRAW-DOWN AGE (DDA) FOR CPF MINIMUM SUM
Age as of
31 Dec 2007
Draw-Down Age
(DDA)
Year to draw down CPF Minimum Sum
60
62
2009
59
62
2010
58
62
2011
57*
63
2013
56
63
2014
55*
64
2016
54
64
2017
53*
65
2019
52
65
2020
51
65
2021
50
65
2022
49
65
2023
* These are the cohorts first affected by each change
in the DDA
Singapore Government Press Release
Media Relations Division, Ministry of Information, Communications and the Arts,
MICA Building, 140 Hill Street, 2nd Storey, Singapore 179369
Tel: 6837-9666
NDR 2007
City of Possibilities; Home for All
1. Introduction
2. Income Gap – leaving no one behind
3. Upgrading Education – levelling up society
4. Ageing Population – living active lives
5. Working Longer – more savings for old age
6. Improving CPF – building a nest egg
7. Upgrading & Renewal – best home for all
8. Forging Ahead – go for it together
Introduction
1. Singapore is on the move
a. Things are looking good
b. Growing buzz and confidence
c. Overall outlook is positive
2. External environment favourable
a. Optimism all over Asia
b. Recent turbulence in global financial markets
i. May affect economies in US and Europe, and also Asia, over the next 3-6 months
ii. But fundamentals for Asia remain strong
c. ASEAN countries are benefiting from a strong Asia and high energy prices
i. Singapore has taken over as Chairman of ASEAN
ii. Focus on making ASEAN stronger and more integrated
iii. So that ASEAN countries can keep pace with China and India, and not be left behind
d. Relations with Malaysia and Indonesia are good
i. Cooperating in many areas, on win-win basis
ii. Some outstanding issues with both countries
iii. But will deal with the issues in the broader context of our overall relationship
3. Singaporeans are all over Asia and the world
a. Southeast Asia, India, China, Middle East, Central Asia, even Mongolia and Brazil!
b. This is the way to thrive in a globalised world
4. But must secure our home base
a. Create the conditions for Singapore to grow
b. Give every citizen a stake in the country’s success
c. Create a sense of security and hope
d. Build a nation which we can all draw strength from
e. A home base from which to venture forth and seize opportunities around us
5. This means adapting and changing, again and again, as the world around us changes
a. Changes to make our economy vibrant and competitive
i. This is what we have been doing
(1) Restructuring the economy
(2) Reforming taxes – lower income taxes, higher GST
(3) Developing the IRs and remaking our city
b. Changes to strengthen our social cohesion
i. To draw us closer together despite the tidal pull of external forces
ii. So that we are not divided between different races and religions, rich and poor, or winners and losers
iii. So that Singapore stays a home where we all belong
6. This is how we can sustain our exceptional performance
a. Tackle difficult problems that come our way
b. Move forward as a nation
7. Tonight, focus on one major challenge ahead – widening income gap
a. Discuss related issues – education, ageing population, and housing
Income Gap
1. We know why income gap is widening – globalisation, technology, and cut-throat competition
a. This is the way the world is going, and Singapore will be carried along
b. Lower end
i. Hundreds of millions of unskilled workers in China, India and Vietnam entering the workforce, and holding down wages
ii. Our workers are feeling it too
c. Middle and higher end
i. IT automating simple jobs
ii. Knowledge economy putting premium on education and skills
iii. Demand for people with skills to do what computers and robots cannot do
iv. Each extra year of schooling – 14% increase in wages
v. Increase is even higher for university education
d. At the very top, fierce competition
i. In sports, you want to watch Tiger Woods play golf, or Roger Federer play tennis
ii. If a company is hiring a CEO, they try hard to get the best candidate, not one who is almost as good
iii. If you need legal advice, you want to hire the best lawyer to fight your case
iv. Winner takes all – top incomes zooming up
(1) Tiger Woods earns US$100 million a year (prizes and endorsements), much more than the No 2 (Jim Furyk)
(2) Widening gap between the best and the rest
e. Income gap is also linked to the ageing population
i. Many of the poor are likely to be elderly
ii. Those who do not provide enough for old age will face difficulties in retirement
2. What can we do?
a. First overall strategy is to grow the economy
i. Generate more resources to help those in need
b. Ageing – very difficult problem with no easy solutions
i. Will talk more about this later
c. For the lower-end
i. Emphasise training, skills upgrading and job redesign
(1) Raise the productivity of low-income workers
(2) Help them to earn better pay
(3) This is what NTUC is doing
ii. Plus Workfare
d. For those at the top – good that they are doing well
i. Can’t hold down their incomes, or levy higher income taxes
(1) Talent will leave
(2) Our economy will lose vitality
(3) Many others will suffer
(4) We are prospering now because we have brought income taxes down, welcomed talent, and attracted businesses to thrive here
ii. But those who have succeeded must show that they care for their fellow citizens, e.g. through philanthropy
(1) Happening in the US
(2) Here too – many Singaporeans are donating generously to good causes, e.g.
(a) Universities
(i) NUS, NTU and SMU receive endowments to fund many projects; they have nearly 80 endowed professorships
(ii) Major donations
[1] Lee Kong Chian School of Business in SMU
[2] Yong Loo Lin School of Medicine in NUS
(b) Hospitals
(i) Tan Tock Seng
(ii) Khoo Teck Puat
(c) Sim Wong Hoo
(3) More people should do this, according to your means, and from your heart
(4) Collectively, these individual responses make our society more cohesive and compassionate
e. For the vast majority in the middle
i. Our policies must enable them to do well, and provide them with many opportunities to move ahead
ii. One major strategy is HDB home ownership
(1) Best form of social welfare for Singaporeans
(2) Give everyone a stake in the nation’s success
(3) Have some new plans, which I will elaborate later
iii. Another is education
(1) Rising payoffs on education
(2) Hence best way to level up our society
Upgrading Education
1. Our aim is to give every child a top-rate education
Schools
2. Hence emphasis on quality of all neighbourhood schools
a. A high base in all schools
b. But each developing its own special area of excellence
c. MOE has worked hard at this
i. More freedom for principals and teachers to experiment
ii. More resources for schools with good ideas
iii. More Opportunity Funds for needy students
iv. Teach Less Learn More
d. At first, sceptics asked: how to teach less and still learn more?
i. But can see it happening now
ii. Tremendous energies and enthusiasm in many schools
3. Visited schools to see for myself
a. Jurong Secondary School in Taman Jurong
i. Students do DVD – Digit,, , al Video and Drama
ii. Make use of digital video in language classes
(1) e.g. Chinese Language teacher assigned students read to a novel during their holidays – “The Little Prince”
(2) Students wrote a script based on the novel
(3) Acted it out with a “blue screen” background
(4) Recorded it on video
(5) Class watched performance, then interviewed the actors in their roles and discussed what they had learnt
iii. I spent two hours in the school
(1) They interviewed me on camera too!
iv. Before I left, presented me a DVD of my visit
b. Mayflower Primary School in Ang Mo Kio
i. Focussed not just on grades, but also character, moral values, and social skills
(1) Students work in groups
(2) Desks in classrooms arranged in clusters, not rows
(3) Involving parent volunteers actively
ii. Teachers are full of spirit and passion
(1) Committed to teaching every child
(2) Have conviction and pride in what they are doing
(3) Several with school-age children have their own kids in Mayflower
iii. Could see the difference in the children
(1) Asked teachers whether they could get pupils to speak up in class
(2) Greatly cheered by reply: “the problem is how to stop them speaking!” (Solution: appoint “Noise Managers”)
iv. Put up a full scale musical – Our Time to Shine
(1) I saw them rehearsing
(2) Seng Han Thong attended musical, and emailed me
(3) I had said in the National Day Message that we will have a new Singapore, with its own unique identity and can-do and never-say-die spirit
(4) This reminded him of the musical
(5) Quote him:
“It was by our very own Ang Mo Kio heartland neighbourhood school, Mayflower Primary School, that has the same spirit of "can-do and never say die." I felt very proud to see many of our Ang Mo Kio little boys and girls performing confidently on the stage. … They acted professionally, they sang happily and they danced gracefully.
“I turned my head back and encountered many familiar faces. These are the parents and grandparents who might not believe that one day their children and grandchildren could perform so well on the big stage. I saw smiling and proud faces all around.
“It was indeed an occasion that made one realise that Singapore is a City of Possibilities.”
c. Many more exciting things happening in schools all across Singapore
4. This is our fundamental approach to uplift all Singaporeans
a. Whichever school you go to, whatever home background you come from, we will help you develop your talents to the fullest
b. Provide many ladders to success, and help you climb up as high as you can
5. All this depends on a high-quality teaching force
a. Good teachers, principals, MOE staff, dedicated and passionate about teaching
b. This is what we have, and what our future depends on
c. Invited a few here tonight to represent all 28,000 teachers in Singapore
d. Please stand
e. We salute you
Malay Language
6. Cover one aspect of our school education – language skills
a. Many older Singaporeans can understand and speak Malay and Bahasa Indonesia, including non-Malays
b. But too few in the younger generation
c. Need more people to be familiar with the language – may not be totally fluent, but can chit-chat and understand the gist without translation
i. Then we can interact with our neighbours in their language
ii. Work together on opportunities, and deal with issues which arise from time to time
7. Emphasise
a. No change in mother tongue policy
b. But must encourage more non-Malays to learn Malay in addition to their mother tongue
8. Two initiatives in secondary schools
a. The Malay Special Programme (MSP) – to study Malay as 3rd language – but not very popular
i. Introduce incentives to encourage more students to take up MSP, including bonus points for JC admission
ii. Similarly, extend incentives to non-Chinese students who take Chinese as 3rd language
b. Introduce a Regional Studies Programme in a few secondary schools
i. Offer scholarships for this Programme – 100 per year
ii. Students will do Malay as 3rd language, and learn about our Southeast Asian neighbours
iii. Good if one school can offer Bahasa Indonesia
Universities
9. Beyond schools, aim to get every student into post-secondary education, and as many as possible into tertiary institutions
a. We have invested heavily in ITE, polytechnics and universities
i. Increased intakes over the years
ii. More students progressing from ITE to poly, and from poly to university
b. With good schools
i. More students want to go to university
ii. This year, many fretted over university admissions
iii. Not really because of dragon babies
iv. Universities increased the number of places more than proportionately
v. But more students are applying, and anxieties persist
c. Also many polytechnic graduates hope to go on to get a degree
i. 15% now proceed to NUS/NTU/SMU
ii. More getting degrees by other routes, including many who go abroad
10. Should expand university places, but make sure students get a good education and are equipped with valuable skills
a. Some countries have produced large numbers of graduates without regard for quality or employment opportunities
b. They face big problems – graduates are unemployed, or underemployed
11. Today, 23% of every cohort receive subsidised education in the three universities (NTU, NUS and SMU)
a. Aim for 30% of Singaporean cohort in publicly-funded universities by 2015
b. This means 2,400 more places each year
12. This also means a 4th publicly-funded university
a. Existing universities are already rather large; should not expand them further
b. Develop a new institution with its own character and unique strengths, different from NUS, NTU and SMU
c. May not limit ourselves to just one new institution
i. Could open more than one route
13. Lui Tuck Yew will chair a committee to study how we will expand the university sector
a. Dr Tony Tan will be advisor to the Committee
b. Will decide within a year on the best way to proceed
14. With these changes in our schools and in higher education, Singaporeans can look forward to:
a. More opportunities to receive a first-class education
b. More pathways to success
Ageing Population
1. One factor in the widening income gap is our ageing population
2. Singapore has one of the fastest ageing populations in the world
a. Not enough babies
b. Singaporeans are living longer
i. Conversation with Father Michael Arro, Parish Priest at the Church of St Teresa
(1) He came from France 50 years ago
(2) Then his parishioners retired at 55, and he held funeral services for them around 60 – 5 years
(3) Now, people retire at 62, and live longer to around 80 – around 20 years of retirement!
ii. Father Arro was spot on
(1) In 1957, average life expectancy was 61
(2) Today, average life expectancy is 80
(3) Many will live longer, e.g. to 90, or 100 and beyond
(a) 9,000 Singaporeans over 90 years old
(b) Of these, 500 Singaporeans are over 100!
(i) e.g. 110-year-old Teresa Hsu – featured on CNA programme (“The New Old”)
(ii) She is not the oldest
(4) Also saw retired Prof Ann Wee (81) on the programme
(a) Described herself as OPWA (Old Person With Attitude)
(b) Said she aimed for a “rectangular life”
(c) Happy and meaningful life for as long as you live
(d) When the time comes, let it be quick and painless
(5) Aim not to live forever, but to have a good life, and a good death
(a) What Hokkiens call “ho see” (好死)
(6) Japanese have the same philosophy
(a) Seek three major components of a happy life: “ample eating, leisurely sleeping, and sudden death”
(b) Special temples where people go to pray this – “pokkuri dera” (temples blessing longevity and painless death)
c. What will Singapore be like in 2020?
i. Visited Radin Mas – Sam Tan’s ward
(1) 17% of residents (1 in 6) are aged 65 and above
(2) Singapore as a whole will be close to this proportion by 2020
ii. Show you some photos
(1) Met many senior citizens
(a) Celebrating birthday together
(2) Staying active
(a) RC helps to bring them together
(b) Not just to exercise
(c) Also to socialise and keep in touch
(3) Sam Tan started “Project Golden Service”
(a) Help them to pick up skills, do something meaningful and earn some pocket money
(b) Some are good at calligraphy
(c) Others give haircuts
(d) This 67 year old makes fancy ketupats
(e) One group of women (in their late 70s) get together every weekend to chat and sew quilts
(4) Chatted with these two ladies
(a) Mdm Ng Sock Cheng, 68
(i) Old resident of mine in Teck Ghee
(ii) Had a spine operation and was wheelchair-bound
(iii) Joined a religious group, made friends, chants and meditates daily
(iv) Regained her strength and now walking again
(v) Said “I have something to look forward to, chatting with my friends, thinking of new things to do, all the time getting stronger”
(vi) She asked me: her CPF runs out this year. What will happen after that?
(vii) Have some ideas to make the CPF last longer – will talk about this later
(b) Mdm Lee Siew Lan
(i) 91, but still working as a cleaner in Redhill Market
(ii) Introduced by the hawkers to the cleaning contractor (courtesy of NTUC’s job re-design programme)
(iii) Officially earns $800, but she moonlights helping out hawkers
(iv) Fiercely independent. She said: “When people give me free things, I don’t accept. Why, when I can afford to pay? But if they say OK, you are a friend, we give you a discount, then I think ‘OK, friends can accept kindness’”
(5) Also met Mdm Loke Tai Hoe, 89, retired samsui woman (Slide 8)
(a) Here chatting with Tuck Yew
(b) Came to Singapore at age 18, and worked till she was 79
(c) Brought up 10 children
(d) Husband has passed away, now lives with four unmarried children
(6) As Singaporeans grow older, need more help
(a) In Radin Mas, flats are fitted for elderly living
(b) VWO downstairs
(c) Social workers and RC volunteers visit the old folks regularly and help to look after them
(d) All the old folks are very grateful – many told me about “德教” – Thye Hua Kwan Moral Society
(7) Happy to see that they are active, healthy, and cared for by the community
(a) But worried that more and more elderly are living by themselves
(b) Best solution is still the family
(i) Stay with children
(ii) Or at least have children staying nearby who visit them regularly
3. Radin Mas is a glimpse of our future
a. All wards have senior citizens like these
b. Radin Mas has more, but not the oldest ward – Kreta Ayer-Kim Seng in Jalan Besar GRC even older – 25% (or 1 in 4) above 65!
c. By 2020, all of us will have a lot more white hair
d. Whole society will need to make many adjustments
4. Government is seized with this issue
a. Lim Boon Heng is working on it full time
b. Talked about this in Chinese earlier
c. One important aspect – savings for old age
5. REACH recently did a consultation exercise on Active Ageing
a. Two thorny issues consistently came up
i. Employment opportunities for older workers, i.e. working longer
ii. Having sufficient funds for old age, i.e. CPF savings
b. Will focus on these
Working Longer
1. Best way to have enough savings during old age – stay employed and work longer
a. With longer lifespans, countries around the world like the US, UK, Japan are trying to get their people to work longer and receive state pensions later, in their late 60s
b. We too have to make this adjustment
i. Do not expect all Singaporeans to work till their 80s and 90s like Mdm Lee and Mdm Loke
ii. But to retire at 55 or even at 62 is too early
iii. Lim Swee Say (coming back from the US) told me:
“During a walkabout, I talked to a resident at the market. He was healthy looking.
(1) LSS: How old are you?
(2) Resident: 72.
(3) LSS: Wow. You are looking healthy for your age. Are you still working?
(4) Resident: No. I retired a long time ago, when I was 55.
(5) LSS: 55! Why did you retire so young?
(6) Resident: Because I didn’t know I was going to live so long!”
c. How to get more people in their 60s working?
i. Discussed with union leaders
ii. This is their foremost concern
iii. Workers themselves want to continue working, which is a tremendous plus
iv. But need to enable more to do this
d. How? Three ways:
i. Education
ii. Legislation
iii. Financial Incentives
2. Education
a. Changing mindsets for both employers and workers
b. Employers must recognise the value of older workers
i. Deploy them effectively, to make the most of their abilities and strengths
ii. e.g. SBS Transit using retired bus drivers as Service Mentors to guide new drivers
c. Workers must adjust too – be prepared to change gears after 62
i. Accept lower pay and lighter work
ii. Accept lower appointments so younger ones can move up
iii. e.g. SingPower Senior Technicians retiring and being re-employed as Technicians
d. Have spoken about this before, and so will not say much tonight
3. Legislation
a. Clear signal to employers and the public that we are serious
b. Some ask – why not just pass a law to raise the retirement age?
i. Experience shows this will not solve the problem
ii. Legal retirement age now 62
(1) But only 2/3 of men are still working up to 62
(2) 1/3 have stopped earlier, despite legal retirement age
(3) Many women stop working even earlier
iii. Simply raising retirement age beyond 62 may discourage employers from hiring older workers
c. Better approach – legislate for re-employment to continue working beyond 62
i. More flexible for both employers and employees
(1) Not necessarily the same job
(2) Not necessarily the same pay
ii. Does not mean that every worker will definitely get a job
(1) But employer must make an offer
(2) Take into account worker’s performance, health and preferences, and company’s needs
(3) In most cases on an annual basis
(4) Both sides work out a win-win arrangement
iii. This is what the Japanese have done, after long preparation
d. We will do this
i. We will pass law to take effect from 2012
ii. Require employers to offer re-employment to workers reaching retirement age, i.e. 62
(1) First step – up to 65
(2) Later, push this up to 67
4. Financial Incentives
a. Government will provide incentives for older people to work, and for employers to hire them
b. Workfare Income Supplement (WIS)
i. One important tool to achieve this
ii. Already tilted in favour of older workers
(1) Starts at 35 – ¾ of the benefit
(2) Above 45 – full benefit
iii. Further higher tiers for older workers in their 50s and 60s to strengthen incentive
iv. Had planned to do this when we review the Workfare scheme in a few years
(1) But better not wait
(2) Will move now
(3) Make a strong push to get people working
c. Will introduce higher tiers of Workfare for older workers – above 55
i. Up to double the payout for younger workers
ii. Currently, a worker aged 60 earning $1,000 gets $100 a month from WIS (actually $1,200 a year), or 10% of salary
iii. Under revised scheme, will double this to $200 a month, or 20% of salary
d. Will make a big difference
i. More take-home pay and more CPF
ii. Encourage older workers to be re-employed
iii. Encourage employers to hire older workers, instead of replacing them by younger ones or foreign workers
5. These are proposals from the unions and Tripartite Committee on Employability of Older Workers, chaired by Gan Kim Yong
a. Good ideas that we are implementing
b. Raise employment rates for older Singaporeans, and help them to save more for old age
Improving CPF
1. CPF – underpins our social security system
a. Good system that has served us well
b. Funded by contributions from both workers and employers, not out of taxes
c. Meets three key needs
i. Housing
ii. Retirement income
iii. Medical care
d. But CPF system has to be adjusted and brought up to date
i. When CPF started, life expectancy was 61
ii. Now it is 80
e. Three changes:
i. Improve the returns on CPF savings
ii. Draw down your CPF savings later so that they last longer
iii. Cover risk of living longer than expected
Improving Returns
2. First question – how to increase returns on CPF savings?
a. CPF pays interest – currently 2.5% for Ordinary Account (OA), and 4.0% for Special, Medisave and Retirement Accounts (SMRA)
b. Like a savings account in the bank, but better
c. Totally risk-free – balances guaranteed by Government
d. Returns sometimes lower than buying shares, but not like buying shares, where you can make big or lose big (like recently)
e. Those who want higher returns and accept higher risks can invest their money themselves, through the CPF Investment Scheme (CPFIS)
3. Our main focus is to help the lower- and middle-income groups
a. Many have modest balances
b. Half of active CPF accounts are below $45,000
i. Active means people who are working and contributing
ii. Includes younger workers just starting to save
iii. Older workers will have higher balances
c. Unwise to encourage these members to invest on their own in stocks, shares etc
i. Do not have enough savings
ii. Do not have expertise
iii. Should not expose themselves to excessive risks
iv. In fact, many who have invested on their own have not done well
4. Solution
a. Enhance existing risk-free framework
b. CPFB will pay higher interest, up to a cap
i. 1 percentage point more
(1) On first $20,000 in your Ordinary Account
(2) And on up to a total of $60,000 on your combined Accounts (i.e. OA + SMRA)
ii. More than half the active members will get 1% more on all their balances
iii. You can still use the $60,000 for housing or medical expenses
iv. But not to take out to invest on your own (through CPFIS)
c. Beyond $60,000, maintain status quo
i. If you have this much, you should be able to look after yourself
ii. Can invest money yourself through the CPFIS
5. This 1% more will make a big difference
a. A young man who starts work today at 21, earns $1,700 per month, and buys a 4R HDB flat, will earn about $20,000 more interest at 55
b. i.e. one-quarter more interest than before
c. Cost Government $700 mn a year initially, and the amount will grow in future as members save more in their CPF
d. A lot of money – equal to the entire government grant to the HDB every year ($750 mn)
e. Done our sums carefully to make sure it is a reasonable rate to pay on CPF balances, and which the government can afford
f. Right thing to do, to help low- and middle-income Singaporeans save enough for old age
6. Reassurance to those who own or plan to purchase HDB flats – no change to concessionary HDB loan rate formula
Delaying Drawdown
7. Second question – how to make CPF savings last for member’s life expectancy?
a. Currently at age 55
i. Set aside Minimum Sum
ii. Settled this in the last round of CPF changes
iii. No change
b. Age 62
i. Start to draw down from Minimum Sum and collect your monthly payments for up to 20 years
ii. This is the Draw-Down Age (or DDA) for the Minimum Sum
c. Recall problem that Mdm Ng faces
i. Even with higher interest, if we start drawing down CPF too early, the money will run out too soon
ii. If we start later, the Minimum Sum will last longer
iii. If you defer draw down by 1 year, you will earn more interest and the money will last 2 years longer (20 years later)
d. 62 + 20 = 82
i. But many people will live beyond 82 – more than half, especially women!
ii. Hence need to raise DDA
8. We are legislating for re-employment till 65, and pushing hard to get more people working into their 60s
a. Must raise the DDA to match
9. Will raise DDA progressively
a. Re-employment till 65 starts in 2012
b. Correspondingly start raising the DDA in 2012
c. Raise progressively year by year
d. Reach 65 by 2018
e. Then Minimum Sum will last till you are 65 + 20 = 85, which is better
10. Impact on age groups
a. Those nearing 62 (58 and above) – not affected
b. Those slightly younger – DDA goes up just a little
c. Those not approaching 62 yet (53 and below) – DDA goes up to 65
d. Press will carry the details tomorrow
11. I know this is not so popular
a. ST survey – everybody wanted higher CPF returns, wanted to work longer, was worried about saving enough for retirement, but few wanted to delay the DDA!
b. But we have no choice – people living longer, we must work longer, and start drawing on our savings later
c. Hence must start moving now
12. Government will give something extra to help older workers affected by this deferment of the DDA (those in their 50s)
a. Pay one-off bonus interest into their CPF RAs – a “D-Bonus” (Deferment Bonus)
b. Also bonus for those who voluntarily defer their DDA, even if they are 58 and above – a “V-Bonus” (Voluntary Deferment Bonus”)
c. Will give details later
Annuities
13. Third question – what if you live longer than expected?
a. Risk that your CPF will run out – “longevity risk”
b. Problem lessened when DDA goes to 65, and Minimum Sum lasts till 85
i. But many will still live beyond 85
c. Other pension schemes face the same problem
i. One solution is annuities
(1) Pay lump sum to the insurance company
(2) Get a monthly payment for the rest of your life, however long you live
ii. e.g. Switzerland
(1) Individual savings up to 65
(2) Then convert to a compulsory annuity
14. CPF allows annuities too
a. Can convert Minimum Sum to an annuity
b. But voluntary, not compulsory
c. Few people take it up
i. Singaporeans do not quite understand annuities, or the need for them
ii. Returns are not very attractive
d. But we still need annuities
15. Will make some form of annuity compulsory for CPF members
a. Will apply to those now below 50
b. We will study, consult industry, educate CPF members, and work out a detailed scheme
Summary of CPF Changes
16. Three major changes to the CPF:
a. Higher CPF interest – 1% more on first $60,000
b. Later DDA – from 62 to 65
c. Compulsory annuities – for those now below 50
17. Have outlined the key points
a. Omitted many details
b. Ng Eng Hen will make full presentation in Parliament in September
18. Changes will bring our CPF system up to date, but will not solve problem for all time
a. Have to continually update the system, with changing needs and demographic trends
b. In particular we will need to go beyond 65
i. Both for reemployment, and for DDA
ii. After we get to 65, will review situation
iii. And move to 67 once we are ready
c. If we make these changes in good time, Singaporeans can have peace of mind in their golden years
Upgrading & Renewal
1. Besides CPF savings, housing is another major policy
a. Both to narrow income gap
b. And to build a nest-egg for old age
c. When economy grows, values of flats go up
d. When Government has surpluses, we can upgrade your flats, neighbourhoods and new towns
2. Three aspects to consider
a. Front-end – buy the flat
b. In the middle – enhance the value of the flat
c. Tail-end – monetise the flat for old age
d. We have policies for each part
3. At the front-end
a. Give more help to lower-income to buy HDB flats
b. Introduced Additional CPF Housing Grant last year
c. Will enhance it further
i. Grant is now up to $20,000
(1) Increase to $30,000
(2) A lot, compared to 3-room flat posted price of $120,000
ii. Also raise household income ceiling
(1) Now limit is $3,000
(2) Raise to $4,000
(3) Cover about half of all households in Singapore
4. At the tail-end
a. Make it easier to monetise the flats
b. Especially for those in 2R or 3R flats who have only had one bite of the cherry
c. For this group, the Government will help them to unlock the value of their flats
i. Right now, can sell the flat and move to a studio apartment with 30-year lease
ii. Introduce new scheme – HDB will buy back the tail end of the lease on your flat, and leave you with a shorter lease of 30 years on the same flat
iii. Payout in two parts
(1) Lump sum upfront
(2) Monthly payments for the rest of your life (i.e. a form of annuity)
iv. Scheme is for those aged 62 and above
v. 30-year lease should be sufficient, but working out some arrangement if you live longer
vi. MND is studying this
5. Today, focus on the middle part – enhancing the value of your home through upgrading and estate renewal
a. We have many upgrading programmes
i. Most popular – Lift Upgrading Programme (LUP)
ii. Made this a priority, especially with our ageing population
iii. Will complete LUP by 2014
b. Also have schemes for private estates
i. e.g. Estate Upgrading Programme (EUP) for major upgrading works
ii. But private estates sometimes still feel neglected
iii. Lim Hwee Hua chaired a committee to see what we can do
(1) Revamp the EUP to bring together and coordinate all the works we are doing
(2) Give private estates Community Improvement Project Committee (CIPC) funds like HDB estates, to carry out smaller scale but more timely enhancements
(3) Hwee Hua will provide further details
c. But most Singaporeans live in public housing, and this is HDB’s mission
i. Continually finding ways to improve and meet new needs and expectations
ii. From Toa Payoh to Ang Mo Kio, Bishan, Pasir Ris and Sengkang
iii. Each new estate an improvement over the previous one
New Estates
6. Next new housing development – Punggol
a. Started Punggol 21 in 1998
i. Slowed down due to the financial crisis
ii. But now demand is picking up again
iii. Time to get things back on track
iv. Used the time to upgrade the plan – Punggol 21+
7. Show satellite image of Singapore
a. Zoom into Punggol
b. Dam up the river mouths of Sungei Punggol and Sungei Serangoon to create two reservoirs
c. Create a waterway to link the two reservoirs
d. Build the town starting from the Town Centre, and then extending along both sides of the waterway
e. Fly in for a closer look
f. Best flats are those with a river view
i. View from inside a flat
ii. View from outside – gardens everywhere including on rooftops
g. Town centre by the waterfront
i. Malls, retail outlets, F&B, even al-fresco dinning by the water
8. Punggol 21+ will take some years to build
a. But can already see something coming up upstream along Sungei Punggol
i. New Anchorvale Community Club in Sengkang
ii. Co-located with a sports and recreation centre – 4 swimming pools, indoors sports hall, and football field
iii. Will be built by the end of the year
iv. Also a floating island nearby, part of MEWR/PUB’s ABC Waters programme
9. This is how Punggol 21+ will look like
a. Many things to do all around the coastline
b. Water activities, e.g. canoeing and kayaking
c. Cycle or jog all along the coastal promenade
d. Chilli crabs at the old Punggol Point
10. Punggol 21+ is the face of the new Singapore
a. City with fun and buzz (in Punggol, and downtown with the IRs)
b. Retaining our present image of a clean, green and safe island
c. Important that we do not lose our present brand recognition as we acquire new attributes
Old Estates
11. Old estates also have great potential
a. We are already redeveloping selected sites within these estates
b. But where we can clear a large piece of land, we can do more to transform the whole area
c. e.g. Dawson Estate in Queenstown
i. Show you where it is on the satellite picture
(1) Queenstown MRT
(2) Completed SERS project – Forfar Heights (Strathmore Ave)
(3) New flats – Clarence Ville (Tanglin Road)
ii. A lot of open space to develop 10,000 HDB and private flats
(1) Start with three HDB precincts
(2) Alexandra Canal
(a) Decked over it
(b) Building a new linear park on top
iii. Show you some pictures
(1) Linear park
(2) Invited award-winning local architectural firms to design the flats
(a) Flats integrated with one end of the park
(b) Precinct at the other end
iv. Quite a contrast to the old SIT flats
v. But will preserve some old landmarks in the area
(1) Old wet market along Commonwealth Avenue
(2) Old town centre square nearby
vi. Merge them into the new development
(1) Retain the memories and character
(2) There will be something extra about the place
Middle-aged Estates
12. Neither new nor old, but middle-aged estates
a. Two key programmes to upgrade these estates – MUP and IUP
i. We have been doing since 1990 – going on for 17 years
ii. Many residents have benefited
iii. Time to upgrade the upgrading programme!
b. Grace Fu has been chairing the Forum on HDB Heartware
i. Received many ideas and requests
ii. We now have improved versions of our upgrading programmes
c. Replace IUP with the Neighbourhood Renewal Programme (NRP)
i. IUP was for individual precincts
ii. NRP will combine two or more precincts
iii. Bigger area and larger scale – can plan more and better facilities
iv. Will still have standard items, e.g. BBQ pits, community gardens, covered walkways, reflexology footpaths etc
v. But now can also consider non-standard items
(1) e.g. street soccer court
(2) e.g. skating park
(a) Already have them in Bedok and Orchard – very popular
(b) Will be quite a thrill for the young people
vi. But up to residents to decide what items you want
(1) We will call a Town Hall meeting, and get the residents involved
(2) You decide what you want for your own communities
d. For individual flats, will replace the MUP with a new Home Improvement Programme (HIP)
i. Feedback from focus groups
(1) Most popular requests are for practical improvements within the flat
(2) Fix spalling concrete on ceilings
(3) Upgrade toilets and bathrooms
(4) Replace entrance doors and grille gates
ii. With the HIP, you will get all of these improvements
e. All of these upgrading programmes cover many flats
i. They will be in housing estates all over Singapore
ii. Show you how they all fit together
iii. These are the HDB townships all over Singapore
(1) For flats built up to 1980, 100,000 have already benefited from MUP – blue dots (one dot per precinct)
(2) Another 100,000 have not yet benefited, and will now enjoy the HIP – light blue dots
(3) Extend the HIP to slightly younger flats
(a) Many flats built between 1981 and 1986
(i) Peak period – HDB built 50,000 flats in some years
(ii) QC was not so good
(iii) It has been 25 years
(iv) Some are starting to show signs of wear and tear
(b) We will extend the HIP to these flats
(c) They will also enjoy the NRP
(d) Another 200,000 flats eligible, or one-quarter of the total flats in Singapore – red dots
(e) Five main clusters – Jurong East, Bukit Batok, Yishun, Hougang, Tampines
(f) Choose two towns to pilot the HIP – Yishun and Tampines
(4) Extend the NRP to even younger flats
(a) Those built between 1987 and 1989
(b) Another 60,000 flats eligible – green dots
iv. Effect of all this
(1) Nearly all estates in Singapore will be covered
(2) There will be something for everyone
v. Some areas have no dots
(1) These are new flats built since the 1990s, e.g. Northern part of Chua Chu Kang, Sembawang, Punggol, Sengkang and Pasir Ris
(2) No need for upgrading yet
(3) But your turn will come
(4) Provided Singapore continues to grow and we have the resources to continue these programmes
13. How will our estates look like after all the upgrading?
a. HDB made a video clip
b. New look of public housing
i. First-class living environment
ii. Homes set with greenery and water
iii. Draw our communities closer together
iv. Foster a sense of belonging
c. No other city in the world has this
i. Public housing that is attractive, affordable and appealing
ii. A quality home for every citizen
iii. Assets that appreciate in value, and help provide for old age
d. We can do it in Singapore
i. Provided we make the effort and work hard together
ii. Systematically upgrade and renew our homes
iii. Remake our entire city
iv. Will take us 20 or 30 years
v. Eventually, the whole country will be transformed
14. Acknowledge:
a. HDB
b. Animation by Nanyang Polytechnic, School of Interactive and Digital Media
Conclusion – Forging Ahead
1. Focussed tonight on the widening income gap, and especially ageing
a. Explained major strategies to tackle it
i. Upgrading education
ii. Working longer
iii. Improving CPF
iv. Upgrading and renewing our housing estates
b. Brought them together tonight, so that Singaporeans understand the whole picture
2. These are difficult challenges, but we have worked out solutions for each one
3. Strength lies in our people
a. Dedicated workers and capable leaders
b. Not just individual stars, or a small group at the top
c. But a cohesive society and a strong Singapore Team
i. Each giving his best for the nation
ii. Doing things together that none of us could have achieved on our own
iii. This is our greatest asset
iv. This is the secret of our success
4. We are all set to surge ahead
a. After SARS, estimated Singapore’s sustainable growth at 3-5%
b. MTI has reviewed this in the light of last few years
c. Raised the growth estimate to 4-6% for the next 5-10 years
d. At our stage of development, this is an ambitious target
e. But we can do it provided we continue to adapt, stay open, and ride the wave
f. Then we will grow with the whole of Asia, and not just based on what is physically in this island
5. For the next few years, conditions are favourable
a. We should strive to do better than the long-term estimate of 4-6%
6. Wind is filling our sails
a. Let’s catch the wind
b. Set the course ahead
c. Go for it
7. Last year, our sailors at the Asian Games in Doha won 5 gold medals
a. Watched final keelboat match against India
b. Both teams used identical boats, but Singapore won
c. What made the difference?
i. Our people – 5-man crew of Justin Wong, Renfred and Roy Tay, Ivan Tan and skipper Teo Wee Chin
ii. Their abilities and skills
iii. Their training and teamwork
iv. Their determination and will – never giving up, thinking coolly under pressure, battling tenaciously and finally prevailing
8. This is the Singapore spirit which will see us through as we remake our nation and build our home
a. Whatever the challenges, we will tackle them one by one, and sail through
b. Over the next decade, we have a unique opportunity to transform Singapore
c. Together, let us make this truly a City of Possibilities, and a home for all of us
ANNEX TO 2007 NATIONAL DAY RALLY
CHANGES TO DRAW-DOWN AGE (DDA) FOR CPF MINIMUM SUM
Age as of
31 Dec 2007
Draw-Down Age
(DDA)
Year to draw down CPF Minimum Sum
60
62
2009
59
62
2010
58
62
2011
57*
63
2013
56
63
2014
55*
64
2016
54
64
2017
53*
65
2019
52
65
2020
51
65
2021
50
65
2022
49
65
2023
* These are the cohorts first affected by each change
in the DDA
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