The Aging Population

ST Nov 14, 2006
Ageing profile is coming 'tidal wave', but Govt is prepared

By Sue-Ann Chia

LIKENING the issue of an ageing population to a tidal wave poised to hit, Prime Minister Lee Hsien Loong said the Government was preparing for its effects.

It will, for instance, look into helping older Singaporeans unlock the value of their assets, such as homes, so that they will have income in their golden years.

The question was how to unlock the value so they would still have a home - perhaps a smaller one, or on a shorter lease - but convert that value into a steady stream of income that can see them into their old age.

This was something that there were various ideas on, he said, adding that National Development Minister Mah Bow Tan was looking into them.

I love the way PM Lee makes it sound as if he and Mah are coming up with some grand innovative ideas all on their own. The truth is that reverse mortgages are not a new invention. They just haven't happened in Singapore, that's all.

Mr Lee painted a picture of the changing population profile when he responded to issues which MPs had raised in four days of debate on the President's Address at the opening of Parliament.

Mr Lee said there were 112,000 elderly Singaporeans aged 65 and above in 1980 - about the same number of residents as Toa Payoh town.

Last year, this number more than doubled - to 291,000 or 2.5 times the number of people in Toa Payoh.

In 2020, there would be 575,000 people aged 65 and above - a number enough to cover five Toa Payoh estates.

'This is a tidal wave which is coming towards us,' he said as he also cited what it meant for the ratio of elderly people to those of working age.

This ratio was 1:14 in 1980, meaning that for every elderly person here, there were 14 others who were of working age. But the ratio was 1:9 last year, and will narrow to 1:5 by 2020.

In Singapore, this scenario isn't anywhere as scary as it would be, say, in most other developed countries. The main difference is that in most other developed countries, the government is committed to providing pensions, subsidised healthcare, social welfare etc for its senior citizens. As the number of senior citizens increases, it becomes difficult to fund the social welfare system.

In Singapore, there's no welfare system, so the ageing population does not pose such a big challenge for the government. Of course, as the population ages, more voters will belong to the senior citizen category. Then again, most Singaporeans never get to vote anyway, so the PAP will continue to hold all the many uncontested seats in Parliament.

The Government will take a more concerted effort to tackle the problems arising from Singapore's silvering society. And leading this task will be Mr Lim Boon Heng, who has a keen interest in the ageing issue.

Mr Lim - who steps down as NTUC secretary-general at the end of the year - will continue as Minister in the Prime Minister's Office and oversee ageing issues on behalf of the Prime Minister.

I think they used to call Mr Lim the Minister Without Portfolio - perhaps they still do. I too would love to earn more than a million dollars a year while being responsible for nothing in particular.

But Mr Lee reminded the House that the Government had already been addressing some of the issues associated with ageing.

There has been the lift-upgrading programme to have lifts stop on every floor; the Maintenance of Parents Act which ensures children support their parents; and various committees looking into ageing issues and helping older Singaporeans work longer.

All of these are terrible examples. Okay, let's see.

Lift upgrading programme ... Well, I don't have to mention Hougang and Potong Pasir, do I. They each have a very significant senior citizen population, don't they. Their lifts aren't getting upgraded, are they. You know why, don't you.

Maintenance of Parents Act ... Ironically, this piece of legislation wasn't proposed by any PAP Member of Parliament. For that matter, it wasn't proposed by any Opposition member. It was proposed by a Nominated Member of Parliament - Professor Walter Woon. Another irony - it was the previous GST rate hike that inspired Walter to come up with this idea. He was worried that the hike would make things financially difficult for senior citizens.

And now ... the government is about to raise GST again.

I'm also amused to see PM Lee say that "helping older Singaporeans work longer" is one of the ways by which the government is tackling the aging population challenge. Why am I amused? Read my old post here. An excerpt:

Frankly I am not very sure what is the significance of the government raising or not raising the retirement age.

If you need the money, you will want to work. If you like to work, you will also want to work. If you don't need the money and don't like to work, then you won't work.

All of the above holds true, whether you are 45 or 62 or 75 years old.

As for employers, they will employ or offer to employ whoever they think they need, at whatever cost they think they can afford, and at whatever salary they think the employee is worth.

That also holds true - whether the employee is 45 or 62 or 75 years old."

In other words, old folks will work if they have no choice.

Back to the Straits Times article:

Their financial security has also not been neglected.

Singaporeans had the Central Provident Fund (CPF), for instance. 'We've built up their CPF, we've put aside substantial savings, we've allowed Singaporeans to invest these savings in housing and house property values have appreciated for many Singaporeans,' he noted.

Even the poorest 20 per cent of the population have, in their home, a 'significant' asset: about $138,000 worth of equity.

Well, once again you can read my old post about the poor owning a "significant asset" in their own home. Sure, it's significant. And when they sell their own, they will also be significantly homeless.

'Overall, in terms of financial adequacy of our old folks, we have a good system based on individual savings and home ownership,' Mr Lee said. 'It ensures that most Singaporeans have put aside enough savings for their old age.'

There will be a few who will not have enough due to lack of regular work, illness or misfortune which is beyond their control, he noted.

'The Government will do more to help them and will help them to do more to help themselves, as we have been doing,' he promised.

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