By Sharon Chen - Aug 18, 2013 6:30 PM PT
Lee Hsien Loong, Singapore's prime minister, is trying to steer the economy through an aging population and a declining overseas-worker supply by prodding companies to produce more with less manpower and hire older Singaporeans, as well as increasing the birth rate. Photographer: Kiyoshi Ota/Bloomberg
Young couples have held back from having children in Asia’s second-most expensive housing market, where public housing is the only affordable option for many families. With 82 percent of Singaporeans living in apartments built by the state, housing policy has been used to encourage the development of families. Photographer: Nicky Loh/Bloomberg
A woman pays a vendor for her purchases at a market in the Redhill area of Singapore. Photographer: Nicky Loh/Bloomberg
Singapore Prime Minister Lee Hsien Loong pledged to improve housing affordability and revamp its health-care system, increasing support for citizens as the economy adjusts to an aging population and tighter labor supply.
In his annual National Day Rally policy address yesterday, Lee also announced changes to the education system and unveiled long-term plans to free up space near the central business district for housing, offices and recreation. The government will provide help to companies struggling as it tightens the intake of foreign labor, he said.
Lee Hsien Loong, Singapore's prime minister, is trying to steer the economy through an aging population and a declining overseas-worker supply by prodding companies to produce more with less manpower and hire older Singaporeans, as well as increasing the birth rate. Photographer: Kiyoshi Ota/Bloomberg
Young couples have held back from having children in Asia’s second-most expensive housing market, where public housing is the only affordable option for many families. With 82 percent of Singaporeans living in apartments built by the state, housing policy has been used to encourage the development of families. Photographer: Nicky Loh/Bloomberg
A woman pays a vendor for her purchases at a market in the Redhill area of Singapore. Photographer: Nicky Loh/Bloomberg
Lee, 61, is stepping up measures to help Singaporeans buffeted by infrastructure strains, rising living costs and greater competition for jobs, education and housing. The prime minister said the country, which celebrated its 48th year of independence this month, is at a “turning point” and must make a “strategic shift” in its approach to nation building.
The government will “strengthen social safety nets, assure people that whatever happens to you, you can get the essential social services that you need, especially health care,” Lee said. “We will monitor closely how well people can afford housing in Singapore, and over time, as it becomes necessary, we will do more to help the lower- and the middle-income Singaporeans own their homes.”
Aging Population
Lee is trying to steer the economy through an aging population and a declining overseas-worker supply by prodding companies to produce more with less manpower and hire older Singaporeans, as well as increasing the birth rate.
Singapore probably delivered the biggest employment surge among 33 advanced economies in the decade to 2014, according to data compiled by Bloomberg. Annual jobs growth may halve in the coming years from a 2007 peak as the island widens the clampdown on foreign workers, Bank of America Corp. estimates.
“The foreign worker issue is complex and government cannot meet all the demands and there’s no perfect solution but we’ll definitely help small and medium-sized enterprises find a way to make it,” Lee said. “We need to control foreign workers, otherwise it will lead to serious consequences.”
A jump in population via immigration in recent years has stoked social tensions and public discontent, leading to weakened support for his People’s Action Party in elections held in the past two-and-a-half years. The next general election must be held by 2016.
“The groundswell of unhappiness is real, for them to ignore it would cost them significant votes in 2016,” said Terence Lee, an assistant professor of political science at National University of Singapore. “Education, health care and housing are things which of course really matter a lot to Singaporeans.”
Expensive Housing
Young couples have held back from having children in Asia’s second-most expensive housing market, where public housing is the only affordable option for many families. With 82 percent of Singaporeans living in apartments built by the state, housing policy has been used to encourage the development of families.
The administration will increase public-housing grants for some families to afford bigger homes, and add 20,000 pre-school places over the next five years, the prime minister said. While the government will provide more health-care subsidies, that means medical insurance premiums and contribution rates into the national savings system will have to rise, he said.
An insurance program currently known as MediShield will soon be expanded to provide life-long coverage from a current ceiling of 90 years, Lee said. The new plan will be universal and provide better coverage for large hospital bills, and the government will create a package to help the elderly pay for their premiums, he said.
More Babies
The government is encouraging Singaporeans to have more babies to avoid a shrinking pool of workers and consumers, a deterrent to future investment. Lawmakers from Lee’s party endorsed a set of proposals in February to allow more foreigners through 2030 to boost the workforce, which may raise the island’s population to 6.9 million from 5.3 million.
Lee also elaborated on plans to free up 800 hectares of space for homes and offices by moving a military airbase to the eastern part of Singapore. There are also plans to convert a parking lot into shops and an indoor garden at Changi Airport, while a fifth terminal is targeted for completion in the mid-2020s, he said.
More land will also be available after 2027 when the lease for ports at Tanjong Pagar near the central business district expire and operations move to the island’s south-west, Lee said.
“I think it’s necessary to try and extend the CBD, and try to make way,” said Joey Chew, an economist at Barclays Plc in Singapore. “It’s expensive land, it’s valuable land, so it doesn’t really make sense to have a port in Tanjong Pagar.”
The infrastructure changes will take place in the next two decades or so, Lee said.
“These are very ambitious, long-term plans, it’s an example of how we need to think and plan for our future,” Lee said. “If we can carry off these plans, we don’t have to worry about running out of space or possibilities for Singapore. We are not at the limit.”
To contact the reporter on this story: Sharon Chen in Singapore at schen462@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net
