(Delivered in Parliament on 26 February 2020)
Budget Speech 2020
Mr Speaker, monetary and fiscal policy can make or break a retirement dream. It would be meaningless for the working class to receive top-ups and transfers year after year at every budget, with no light at the end of the tunnel for them to realize their retirement dreams.
In the illustration given in the budget annex, a retiree couple, both 65 years old, had only $570 a month in total to support their retirement needs, pre-Budget 2020. That is $285 per retiree. A single person on ComCare Long-Term Assistance Scheme receives $600 a month for basic living expenses. There is no way for this couple to survive on $570 a month. The illustration went on to state that this couple has to supplement their retirement needs with family support and own savings. What if this couple does not have family support and savings?
There was a study released by 2 professors last year that an elderly person aged 65 and above would need at least $1,379 a month to sustain a basic standard of living. That study has provided some food for thought about retirement adequacy.
With the CPF system being the bedrock of our retirement plans, the government expects 7-in-10 active CPF members from the 2021 and 2022 cohorts to be able to set aside their Basic Retirement Sum (BRS). That would mean 30 per cent of the members in these cohorts would not be able to live on their CPF payouts alone, when they reach their Payout Eligibility Age (PEA) in 10 years’ time.
But the more concerning part of the numbers highlighted in the budget annex is the 6-in-10 CPF members who could not meet the BRS a decade ago. Some of these Singaporeans are on the old Retirement Sum Scheme, and would have reached their PEA by now. I have met such members who are receiving less than $300 a month in CPF payouts. Some are still working as they do not have extended families or children to support them.
So for those with little or no savings for retirement, the measures announced in Budget 2020 should go some way to alleviate their hardship and uncertainty. The couple illustrated in the annex at the beginning of my speech would receive $1,400 monthly, post-Budget 2020. Although this is a more meaningful payout per month, at $700 per retiree, it is still predicated on family support and own savings, something policymakers should not presume when formulating policies on retirement adequacy.
For Budget 2020, I welcome the Senior Worker Support Package to help keep jobs for our senior workers, and to increase their CPF savings for their retirement needs down the road. I also welcome the Stabilisation and Support Package to help keep jobs for our workers in general during this period of uncertainty.
Next, the enhancement to the Silver Support Scheme is also long overdue. The expanded criteria for lifetime wages from $70,000 to $140,000 in total CPF contributions and household monthly income per person are expected to benefit about 100,000 more Singaporeans aged 65 and above.
A number of my residents were shut out of the Silver Support Scheme when it was first introduced in 2015 as they had more than $70,000 in their CPF at age 55. Many of them wondered how long does the government expect $70,000 in total CPF contributions at age 55 to last when housing alone would have taken a big chunk of it, if not all of it away? And these people would share that they were low wage earners to begin with and were living paycheck to paycheck with little savings. Some of them could not qualify for the scheme as their gainfully employed but homeless children are still living with them for whatever reasons. The enhancements to the Silver Support Scheme is certainly a welcomed move for elderly Singaporeans in these difficult times.
Next, I have a small suggestion to make about the Grocery Vouchers scheme for Singaporeans aged 21 and above, who live in 1-room and 2-room HDB flats and do not own more than one property. These Singaporeans will receive $100 in Grocery Vouchers for 2020 and 2021.
It was stated in the budget annex that these vouchers can be used at participating supermarkets and to date, NTUC Fairprice, Giant and Sheng Siong have agreed to accept these vouchers. The Grocery Vouchers scheme is expected to cost the government $16m.
Would it not make more sense for the government to avail these vouchers for all the mom-and-pop shops instead, so as to help these small businesses tide over this difficult period at the same time? The $16m budgeted for this scheme would go a long way to help these local provision shops, but it would only be a drop in the ocean for the 3 big supermarkets combined. NTUC Fairprice alone had reported a group revenue of $3.45b for FY2018.
I can understand these big supermarkets would need to agree to accept these vouchers as they would be doing a form of community service. But for those mom-and-pop shops, I am quietly confident none of them would reject these government-backed vouchers, if presented for use.
I have piloted such a voucher scheme for needy residents in Hougang. Our vouchers could be exchanged for anything, including cooking oil, detergents, toothpaste, toilet rolls, etc, with the standard restriction on alcohol and tobacco products. At the same time, these vouchers would actually benefit two small, owner-operated kiosks in Hougang.
I hope the government would consider supporting our mom-and-pop shops in a meaningful way, in addition to the measures announced in the budget. Extending the Grocery Vouchers Scheme to our neighbourhood shops will help bring some buzz and business to the community. This is a win-win arrangement for needy residents and local provision shop owners.
Finally, if there is one lesson for me to take away from this coronavirus outbreak that is gripping the world right now, it is certainly not about the blame game, the discrimination, or the name calling. It is certainly not about the grocery run, the hoarding, and the hunt for sanitizers and what have you. It is about helping a friend in need.
When China sneezes, the world will catch a flu, whether we like it or not. The world’s factory will stop. No cheap raw material. No cheap components. No cheap clothing. No cheap produce. And no tourist. The world has to be thankful to China for being able to provide all that for the benefits of consumers everywhere.
So it is imperative that we wish China a speedy recovery. It is also imperative for the world to help China to get back on its feet as soon as possible. The sooner China recovers, the better it will be for all. So it is heartening for me to read that Singapore has dispatched a second round of humanitarian aid to China last week.
It is important that in moments like these, a sense of common humanity that transcends border, race, language, or religion must prevail.