Ageing with Independence – Budget Speech 2019 by Daniel Goh

(Delivered in Parliament on 26 February 2019)

Budget Speech 2019 – Ageing with Independence

Mr Speaker Sir, the Merdeka Generation Package appears to be the highlight of this Budget. I was born in 1973, I am not sure what the government of the day 20 years down the road will call my generation. My generation was raised by Singaporeans of the Merdeka generation. My parents are from the Pioneer generation and they both worked. Many of my childhood caregivers and teachers were Merdekas.

If there was one value the Merdekas taught me, it was to grow up to be an independent Singaporean, proud and defensive of our independent Singapore, and to think and act independently, beholden to no one but to my country and conscience. This generation truly deserves to be named the Merdeka generation. Not because they happened to be born in the 1950’s, just as Singapore fought and got its independence. But because this generation was imbued with the spirit of independence and imparted the spirit of independence to future generations such as mine.

Today the Merdekas are aged 60 to 69 years old. This stretches across the landmarks of ageing in Singapore, from applying for the senior citizen concession card for public transport at 60 to getting the CPF auto-payout at 70 if they had not opted for earlier payouts. It is my sincere hope that a generation who embodied and imparted the spirit of independence will be able to age with independence.

What I mean by ageing with independence is the ability of our seniors to retire on their own, with as little financial dependence as possible on their children, siblings and other family members, and also on the government and welfare organisations. Except for incidents of serious illness and accidents, seniors ageing with independence will be able to care for themselves or pay for the care that they require to lead purposeful golden years.

I believe the best way to honour the Merdekas is for the Merdeka Generation Package and other government policies to facilitate their ageing with independence. I shall discuss this now in five aspects, in terms of our Merdekas’ physical well-being, socio-economic well-being, financial well-being, psychological well-being and the special concern for the well-being of women.

1. Primary Care

The first aspect of ageing with independence is physical well-being. The healthcare system secures our physical well-being, and our investment in preventive health services is paying off. In recent years, the government has been investing in long-term care to prepare for the ageing society. In an ageing society, primary care is the critical frontline service to keep our seniors in tip-top health. Preventive care is a subset of primary care. Primary care is essential for the early detection and good management of chronic diseases, which are the leading causes of disabilities and deaths worldwide. Our seniors are particularly vulnerable to chronic conditions. Our seniors also need immediate remedies to colds and other common ailments, lest these snowball into major illnesses.

This recognition is built into the Pioneer Generation Package in the form of subsidies for outpatient services. This recognition is continued into the Merdeka Generation Package with the auto-enrolment of Merdekas into the CHAS scheme and further subsidies at polyclinics and public specialist outpatient clinics, as has benefited the Pioneers.

However, this has created a precedent. There is now an expectation that future generations will be auto-enrolled into CHAS and receive outpatient subsidies when they hit their 60’s. Future governments will be hard-pressed into denying future generations of this benefit, not just because of the political cost, but also the sheer logic of the justification. If the Pioneers had worked hard to make Singapore what it is today, if the Merdekas had worked hard so that Singapore stands tall and proud today, who is going to deny that subsequent generations also worked hard to contribute to building a Singapore for future generations?

Did not the generation born in the 1960’s worked hard in the 1980’s and 1990’s during the first major economic restructuring and reskilling of the workforce? Did not the generation born in the 1970’s worked hard in the 1990’s and 2000’s to bring Singapore through the Asian Financial Crisis, the tech bubble recession, and the SARS crisis?

I do not think this is a bad precedent. In fact, it can and should be turned into something good. I therefore call on the government to commit to providing primary care subsidies for all subsequent generations of seniors, that everyone who turns 60 would be auto-enrolled in CHAS and receive additional outpatient subsidies. Again, the Merdeka generation is setting the foundation for subsequent generations.

In the last few years, the government has socialized hospitalization and disability insurance, making it universal and compulsory. With Medishield Life and Careshield Life, we are now dedicated to supporting each other as we age, shoring up our interdependence to secure our ageing with independence. Making it compulsory for all Singaporeans to help each other to pay for hospitalization and disability has helped the government save in healthcare expenditure. Singaporeans paying for each other has allowed the government to focus its investment on the healthcare system and long-term care.

In return, the government should make it compulsory that it provides for primary care subsidies for all future generations of seniors, so that we can all age with independence like the Pioneers and the Merdekas. I believe the government should do this, not because of the political pressure, but because, with MediShield Life and CareShield Life in operation, making primary care affordable for all seniors will plug the remaining big gap to make public healthcare in Singapore truly universal and accessible to all.

2. Working as Long as One Desires

The second aspect of ageing with independence is socio-economic well-being. Singaporeans are renowned worldwide as a people who work hard and play hard. As a hardworking people, socio-economic well-being is a very important aspect of overall well-being. Socio-economic well-being refers to the fulfillment one gets from being economically active. This fulfillment is both physical and mental. It is also social, as work brings people together to interact and collaborate to achieve specific objectives. Thus, many of our colleagues are also our friends.

Human beings are creative animals. What makes us distinct in the animal kingdom is our desire to be creative, to work to create things that become part of our social identity. Work is therefore filled with meaning and purpose. It underpins our dignity as human beings. Life expectancy has increased so much to give us decades of extra time to age with meaning, purpose and dignity. In the post-industrial economy, our workers are skilled knowledge-based workers who are continuously learning new skills. To allow our older workers to work as long as they desire, as long as they are able to, is to allow our workers to age with independence. This is because work provides for meaning, purpose and dignity.

Our older workers should be respected for their experience gathered in a lifetime, and not forcibly retired when they still have so much to contribute in meaningful ways. Our seniors should be allowed to continue to use their skills developed in a lifetime so that they find their lives to be filled with purpose. Our seniors should also be treated with dignity, not subjected to an ageist mindset or have their wages docked mechanically by formula just for crossing some threshold making them “old”, when they can be just as productive.

In this regard, I would like to call on the government to (1) remove the retirement age entirely, (2) move the redefined re-employment age to 70 when employers would place able workers on rolling re-employment contracts and (3) restore the CPF contribution of older workers. This will allow our workers to strengthen their socio-economic well-being and age with independence. Doing this now that the Merdeka generation is reaching the current retirement and re-employment ages of 62 and 67 is very appropriate. From the perspective of the economy and society, it is also a waste of human capital for workers to retire prematurely, when their skills and experience are still invaluable. It is a win-win solution.

Nevertheless, our workers should also be empowered to retire in their 60’s if they want to retire. Retirement for many is not the end of work, but the pursuit of creative activities that could be unpaid work, for example providing childcare for their grandchildren, or part-time work in fields that they couldn’t pursue previously. To enable our workers to work if they can and want to work by removing the retirement age does NOT mean, I repeat, does not mean to get Singaporeans to work till they die. It is to reform the system so that Singaporean do not have to worry about their finances and can retire in the their 60’s if they want to, but they can also continue to work if they want to. The ideal would be that from today, no Merdeka-generation Singaporean would be compelled to retire or forced to work by necessity.

3. CPF as Safety Net

The third aspect of ageing with independence is therefore financial well-being. Once we change our mindset about retirement and allow our workers to work as long as they can work and want to work, and to retire if they want, our approach towards CPF should also change. CPF has already been delinked from the retirement age and re-employment age. The question that remains is what role should CPF play in the new ageing society we are facing?

In our maturing society, and especially from the Merdeka generation onwards, our would-be seniors will increasingly not be dependent on one single source of income to meet their needs. This is a good thing, as it provides the financial basis for ageing with independence. Some will have enough savings that can be used to purchase private annuities. Many will be owners of a housing asset that can be monetised. Others will want to continue to work and they can continue to work to maintain a steady stream of income. In such a context, CPF becomes an avenue of supplementary income.

But CPF is more than supplementary income. CPF is a store of a worker’s savings and is akin to a fixed deposit account. We have to be unequivocal in stating that the monies in a CPF member’s account belong to the CPF member, no fudging around this principle just because there is an employer contribution component and there are occasional government top-ups. Our CPF savings are the fruits of our labour, period. Our CPF monies are our savings secured by the government as a fixed deposit account with attractive interest rates.

In this respect, CPF can be a crucial safety net in two ways.

First, we need to recognize that there will be ageing Singaporeans, whether now among the Merdekas or in subsequent generations, who will not have enough savings and who do not own housing assets. These Singaporeans will not be working because they want and can, but because they have to in order to survive. For these Singaporeans, the Workfare Income Supplement is important, and they may also seek ComCare help. But while ComCare assistance is a dignified option for those who are really destitute and cannot work, it is not the same for a senior who can work. Such seniors would rather age with independence and not be dependent on state handouts.

If their CPF Life payouts can start earlier for these seniors, their financial well-being will be secured with their own savings. Therefore, I would like to reiterate the Workers’ Party call to lower the CPF Payout Eligibility Age to 60, so that Singaporeans can have the option of meeting their needs with this source of supplementary income. Of course, if there is no need for CPF Life payouts to act as supplementary income, seniors should have the option and be encouraged to leave their monies in their CPF account to accumulate interest and get larger payouts later. The youngest of the Merdeka generation is turning 60 years old this year, it is therefore an appropriate time to reconsider this.

Second, CPF can function as an insurance against crises. This is not unlike why many put their savings in fixed deposits. Fixed deposits can be withdrawn easily to meet urgent needs compared to less liquid investments with higher returns. Major illnesses, accidents and other crises can disrupt the normal life-course of an older Singaporean and erode his or her quality of life. One of the first things that many people do in such situations is to cut back on expenditure on quality food, which could worsen their health in the long run. Some may even be forced to sell their housing assets to tide over the crisis.

CPF members can currently apply to make partial withdrawals on medical grounds, if quote “they are physically or mentally incapacitated to ever continuing in any employment” unquote. The condition “ever continuing in any employment” is very extreme. I would like to call on the government to allow partial withdrawals of CPF if a member is so physical or mentally incapacitated to continue in employment for a significant period of time. Such withdrawals should be determined on a case-by-case basis, with the objective being for the withdrawal to help a member tide over the crisis with their own savings so that they can return to employment.

4. Deepening Ageing in Place

The fourth aspect of ageing with independence is psychological well-being. The current understanding is that ageing in place is the best option for our seniors because the stability of their community environment will provide for their psychological well-being. Urban planning and public housing policies can also facilitate this by implementing renewal in ageing estates, so that our seniors are embedded in mixed environments that encourage interaction with younger families, especially if their own children’s families are living close by. Neighbourhood renewal and home improvement projects have also improved accessibility and safety to encourage active ageing.

These initiatives are positive for ageing with independence. But all things being equal, it is a good policy to allow our seniors to live out their lives in the HDB flats and neighbourhoods where they raised their children in and built their community networks on. Place is more than space. Place is a locality made meaningful by memories and relationships. Ageing in place is ageing with independence. The familiarity of the neighbourhood and the neighbours, and the neighbourhood eating places and shops, provide for active seniors who know how to navigate their living spaces to support themselves.

The Merdekas are among the first beneficiaries of our HDB policy to house the nation. The majority of the Merdeka generation would have started their families in HDB flats. Thus, the flats and estates they live in would very likely hold special meaning and memories for them. We should try to ensure that the Merdekas would not need to move from the flats and neighbourhoods they had raised their families and built communities in, so that they can preserve their meaning and memories of home, and age in place and with independence.

The Lease Buyback Scheme is a policy that allows Singaporeans to truly age in place and with independence. Many Merdekas will be reaching or have reached the eligibility age of 65 years old for the scheme. The Merdeka Generation Package is a good opportunity to promote the scheme to our seniors, as there are still too many seniors who are unaware of the benefits of the scheme. The government could build further incentives for Merdekas to take up the scheme into the Package. This way, no Merdeka-generation Singaporean will be forced to downgrade to smaller flats and relocate to an alien neighbourhood because of financial need. They don’t have to sell their flats, just the end part of the lease back to HDB.

5. Merdeka Women

The fifth aspect of ageing with independence is the need for special consideration for Merdeka women. CPF statistics suggest that women in the Merdeka generation need extra help. In 2006, for CPF members aged 51-54, male members’ Ordinary Account and Special Account balances comprised 63 percent of the total balances of all members, leaving female members with 37 percent. This is a substantial gender gap that also suggests Merdeka women earned less from paid work in their lifetime and therefore have less savings beyond the CPF.

While the gender gap is being closed with each generation, there is an urgent need to provide extra help for Merdeka women. We continue to call for gender-equal premiums for CareShield Life. However, since CareShield Life premiums are currently gender differentiated, I would like to call for the participation incentive for female seniors to enroll in CareShield Life to be raised in proportion to the gender gap in CPF savings for their generation.

The Medisave top-ups for Merdeka women should also be calibrated to plug the gender gap. I would also like to call for more generous provisions for Merdeka women who are still caregivers for their aged parents or siblings. Subsidies for long-term home and centre-based care should be increased for them.

Merdeka women should have a special place in our honouring of the Merdeka generation. The far majority of caregivers who have performed the work of childcare and eldercare for decades have been women. This work has been essential for functioning of our society, but this work has gone unpaid. We should honour these women for their sacrifices.

It would be perverse outcome that if, with the additional participation incentive in the Package, more Merdeka men than Merdeka women sign up for CareShield Life because of the gender gap. Merdeka women have given much of their lives caring for their families and others in society. Now that they need care themselves, they may not be able to afford it because they have suffered the opportunity cost of sacrificing full-time work to care for others.

Ageing with Independence is Ageing with Dignity

I believe all our seniors want to age with independence. This is not because they are self-centered and individualistic, but it is precisely because we are Asians who care for family and community. Many of us would have heard stories of or experienced first-hand seniors telling their children to let them die if they were to become critically ill, so that they won’t be a financial or practical burden. Our seniors want to age with independence so that they do not become burdens for the younger generation. This is a natural extension of the spirit of sacrifice they embody, for which we are honouring them with the Pioneer and Merdeka Generation Packages.

We need and we should calibrate our healthcare, manpower, social pension, housing and gender policies to make sure our seniors age with independence. I have made the case that (1) CHAS auto-enrollment and outpatient subsidies should kick in for all Singaporeans who turn 60 years old to plug the primary care gap in our universal healthcare system; (2) the retirement age be removed, the redefined re-employment age raised to 70 years old and the CPF contribution for older workers restored so that our seniors can continue working as long as they can and want; (3) the CPF be transformed into a safety net for seniors, that payout eligibility age be lowered to 60 years old and members be allowed to make partial withdrawals if incapacitated to work for a period of time; (4) ageing in place be deepened by promoting the Lease Buyback Scheme to the Merdekas; (5) close the gender gap in CPF and other savings for our senior women by increasing the Medisave top-ups for them and the participation incentive for them to enroll in CareShield Life.

Mr Speaker Sir, ageing with independence is ageing with dignity for our seniors. If we have missed our chances with the Pioneers, we should not miss this opportunity with the Merdekas. The Merdeka generation represents the very spirit, idea and realisation of independence. We owe it to the Merdekas that they age with independence. Thank you.