Press Releases

The Minister in the Prime Minister's Office and 2nd Minister for Finance, Mr Lim Hng Kiang, told the media today that the Government will take a holistic and coherent approach that goes beyond financial measures to tackle the population challenges facing Singapore. Mr Lim, who has been tasked to recommend specific proposals to address the problem of declining birth rates and to persuade foreigners to become Singapore citizens, said that a package of new measures will be announced by National Day this year. He called on Singaporeans to provide feedback and suggestions on how best to encourage marriage, parenthood, and citizenship.

2. On the procreation front, Mr Lim said that the total number of births per resident (that is, citizen or permanent resident) woman has fallen by more than 30% (as measured by the Total Fertility Rate) since 1980, hitting an all-time low of 1.26 in 2003. This was despite the slew of measures that had been introduced since 1987, ranging from tax reliefs and rebates to direct grants for the second and third child under the Baby Bonus scheme to paid maternity leave for the third child. "We had only 36,000 resident babies born in 2003. That's far below the number of babies that we need each year to replace ourselves", said Mr Lim.

3. The declining birth rate has reflected three key trends - increasing singlehood, later marriages and family formation, and desire for smaller families. The number of singles aged 40 to 44 years has increased over the years, not only amongst graduates, but across the board. Couples are also marrying later and postponing plans to start a family until they feel more secure financially. Finally, couples today are choosing to have fewer children than their parents, reflecting other competing priorities like career or lifestyle choices.

4. Mr Lim said that declining birth rates are not unique to Singapore, but a common problem facing most developed economies. In Asian countries like South Korea and Japan, rapid economic development has been accompanied by sharp declines in birth rates. In European countries, birth rates are relatively more stable but also below replacement rate, reflecting their high levels of economic development. However, countries like France and the Netherlands, have had some success in increasing their birth rates, though slightly. One of the keys to their success is that they have taken active measures to promote a good balance between work and family life.

5. The experience of some of these countries and the many suggestions and feedback given by Singaporeans has prompted the Government to take a broader approach to encouraging family formation. The Government will be looking into ways to address the rising singlehood rate. In terms of supporting parenthood, Mr Lim said that Government will study four main areas:

(a) Maternity Leave: Some working mothers have indicated that the existing eight weeks of paid statutory maternity leave is inadequate for them to recover, care for and bond with their new-born babies. They feel that a longer period of maternity leave will be appropriate. The Government will look into this, taking into account the costs on employers.

(b) Work-Life Balance: Countries that have reversed their falling birth-rates tend to have family-friendly practices in the workplace. The Government, in close consultation with employers and employee representatives, will examine the scope for part-time and other flexible work arrangements that will allow parents to spend more time with their children. A one-size-fits-all approach may not be feasible. Different approaches may be necessary for different sectors.

(c) Child Care and Infant Care: Access to good and affordable child care arrangements is important to parents. The Government already provides a reasonable subsidy for centre-based child care, but infant care is expensive. The Government will therefore look into increasing subsidies for such care, which should also result in more places at infant care centres, and exploring more home-based, family day care options.

(d) Financial Support: Marriage and parenthood are ultimately personal decisions, but financial measures such as grants and tax measures do help. The Government will consider how best to simplify and enhance the existing tax measures, such as allowing certain measures to be claimed by husbands as well as by wives, and aligning the conditions for tax rebates with childbearing patterns. The Government will also consider introducing more flexibility in the use of the Baby Bonus.

6. Mr Lim said that the new package of measures will target the birth of Singapore citizen babies. "No matter how globalised we become, Singapore needs a core of Singapore citizens. This is important not only to maintain the resilience of our economy

PRIME MINISTER'S OFFICE
MINISTRY OF COMMUNITY DEVELOPMENT AND SPORTS
MINISTRY OF FINANCE