E. Renew And Strengthen Our Social Compact


E. Renew And Strengthen Our Social Compact

  1. 188 Sir, the priority of this Government has always been to build a fair and just society, where every citizen is able to develop to their fullest potential and share in the country’s progress. We are continually evolving our policies, as circumstances change, to achieve these goals.
  2. 189 In our earlier decades, we had three pillars in our social security system:
    1. a. Subsidised public housing through HDB to make home ownership a reality for the vast majority of Singaporeans.
    2. b. The CPF to help every working Singaporean save in order to own a home and build a nest-egg for retirement.
    3. c. The 3Ms of MediSave, MediShield, and MediFund, together with Government subsidies, to provide Singaporeans with affordable and quality healthcare.
  3. 190 Over the years, we have strengthened these pillars:
    1. a. We enhanced the CPF so that members with lower balances can benefit from extra interest on their retirement savings.
    2. b. In public housing, we are not just helping Singaporeans own a home, but also upgrading older flats and rejuvenating estates.
    3. c. In healthcare, we have gone beyond the original 3Ms. We introduced MediShield Life to provide life-long universal insurance for hospital bills. And as elderly care needs grew, we introduced CareShield Life and ElderFund to support our seniors.
  4. 191 We also added new pillars of support:
    1. a. First, we put in place ComCare to help people through temporary difficulties, and get support while they are being trained for new jobs.
    2. b. Second, we implemented Workfare to uplift our lower-wage workers. To complement Workfare, we introduced Silver Support to provide an additional plank of support for seniors with limited lifetime earnings.
  5. 192 Besides these five pillars of social support, we have invested more heavily in education as a social leveller and a source of opportunity for every Singaporean. In recent years, we have been investing more, not just in the formal years of schooling, but also through life – starting with KidSTART, pre-school, and extending through adulthood through SkillsFuture.
  6. 193 Over the past year, we have engaged around 6,000 participants in our Conversations on Singapore Women’s Development. Many good ideas have come up, from better support for caregivers, to stronger measures against workplace discrimination. When the plans are ready, the Government will commit resources, and work with our partners to realise them.
  7. 194 So we have been doing more to strengthen our social compact over the years, and across many fronts. But as new stresses emerge, and as we enter a more volatile and unpredictable environment, we will take further decisive steps to strengthen the architecture of social security and opportunity for all Singaporeans.
  8. 195 Our healthcare needs, in particular, will grow as our population ages. We will need to revamp our healthcare ecosystem to cater to more geriatric needs across various care settings. Healthcare will therefore be the major driver of increased social spending in the coming decade.
  9. 196 In every area of spending, however, it is not just a matter of spending more, but also how we spend – to achieve the right outcomes and to preserve the values of individual responsibility and mutual support from the community, even as the Government steps in to do more.
  10. 197 These are complex issues. We are studying them systematically in an effort to renew and strengthen our social compact for a post-pandemic world. We will start with a few major moves in this Budget, which I will explain in turn.

Uplift Lower-Wage Workers

  1. 198 First, we will do more to uplift lower-wage workers.
  2. 199 The Government has accepted and will implement the recommendations of the Tripartite Workgroup on Lower-Wage Workers.
    1. a. So over the next two years, we will extend the Progressive Wage Model to the retail, food services, and waste management sectors. We will also extend it to in-house cleaners, security officers, landscape workers, administrators, and drivers across all sectors.
    2. b. Companies employing foreign workers will be required to pay all their local employees at least the Local Qualifying Salary, which is currently set at $1,400 per month.
    3. c. We will also launch a Progressive Wage Mark or PW Mark to accredit firms that pay Progressive Wages and the Local Qualifying Salary.
    4. d. The Government will require all our eligible suppliers to be accredited with the PW Mark when they contract with us from March 2023.
  3. 200 All of us – businesses, consumers and taxpayers – will have to do our part and contribute to uplifting our lower-wage workers.
  4. 201 I recognise that some firms may need time to adjust to these changes. Some may have locked in long-term contracts based on certain wage assumptions and now face higher manpower costs. Others may find it difficult to raise prices in the short term to support the wage increases.
  5. 202 I will therefore introduce the Progressive Wage Credit Scheme or PWCS to provide transitional support for businesses.
  6. 203 Under the PWCS, the Government will co-fund the wage increases of lower-wage workers between 2022 and 2026. For workers earning up to $2,500, the PWCS co-funding rate will be 50% in the first two years, 30% in the next two years, before tapering to 15% in 2026. We will also provide some support for workers earning above $2,500 and up to $3,000, at a lower co-funding ratio.
  7. 204 With this, the Government will be co-sharing with employers a significant portion of the cost increase. We will set up a PWCS fund for this purpose and start with a $2 billion injection this year. This will provide certainty of funding for the wage increases over the next five years. (See Annex E-1.)
  8. 205 To complement the moves on Progressive Wages, I will also significantly enhance the Workfare Income Supplement. This will give a further boost to our lower-wage workers.
  9. 206 From 1 January 2023, I will raise the qualifying income cap from the current $2,300 to $2,500 per month. This means more workers will get to benefit from Workfare.
  10. 207 I will introduce a minimum income criterion for Workfare at $500 per month to encourage part-timers and casual workers to take up regular, full-time work.
  11. 208 I will extend Workfare to younger workers aged 30 to 34 so that they can start saving for housing and retirement earlier in their careers. They will receive a maximum annual payout of $2,100.
  12. 209 I will also raise Workfare payouts.
    1. a. Those aged 35 to 44 will receive a maximum annual payout of $3,000; those aged 45 to 59 will receive a maximum annual payout of $3,600.
    2. b. Those aged 60 and above will receive the highest maximum payout tier of $4,200 annually.
    3. c. And I will extend this same maximum payout tier to all persons with disabilities, regardless of their age.
  13. 210 The enhanced Workfare is expected to benefit more than half a million workers. (See Annex E-1.)
  14. 211 Our moves on Progressive Wages will cover around 94% of our full-time lower-wage workers. The enhanced Workfare will provide further support to all eligible Singaporean lower-wage workers.
  15. 212 So through the combination of Progressive Wages and Workfare, we expect the incomes of our lower-wage workers to grow faster than the median wage growth over the coming decade. So as our economy grows and society progresses, we will reduce income disparities in our workforce.
  16. 213 In aggregate, we will spend an average of $1.8 billion per year over the next five years, or $9 billion in total for the PWCS and the enhanced Workfare. It is a significant increase and reflects our shared commitment to uplift our lower-wage workers in Singapore.

Boost Retirement Adequacy

  1. 214 Next, we will enhance the retirement adequacy of Singaporeans, especially for senior workers who are preparing for retirement.
  2. 215 Following the recommendations of the Tripartite Workgroup on Older Workers, we will continue to increase the employer and employee CPF contribution rates for workers aged 55 to 70.
  3. 216 We implemented the first increase this year, and have been providing employers with a one-year CPF Transition Offset equivalent to half of the increase in employer CPF contributions.
  4. 217 We will continue with the next step of the increase in 2023, and provide employers with a similar offset. This means that workers aged 55 to 70 will see a total increase of three to four percentage points in their CPF contribution rates over these two years. (See Annex E-2.)
  5. 218 Additionally, with rising standards of living, we will adjust the CPF Basic Retirement Sum, or BRS, to provide members with higher monthly CPF payouts in their retirement years. We will raise the BRS by 3.5% per year for the next five cohorts turning 55 from 2023 to 2027. (See Annex E-3.)
  6. 219 There is no requirement for members to top up their CPF if they are unable to set aside their BRS. Those who set aside the BRS when they turn 55 in 2027 will receive payouts of close to $1,000 per month when they are 65, and these payouts will continue for the rest of their lives. This will give them greater assurance for their basic retirement needs.

Invest in our Children

  1. 220 Just as we uplift our vulnerable groups, we will also continue to enhance social mobility.
  2. 221 The Government is committed to ensuring that all Singaporeans have the opportunities to do well for themselves, no matter their background or starting points.
  3. 222 This is why we continue to invest heavily in our children to give every Singaporean child the best possible start in life. We are now doing more upstream – starting with preschool years to provide additional support for children from low-income families. Yet, some vulnerable children fall out of or behind in our education system because of difficult conditions at home. Early intervention in their formative years can make a big difference in their lives.
  4. 223 One important intervention is to provide these children with a more conducive living environment to grow up in. For second-timer low-income families, we have the Fresh Start Housing Scheme to help them purchase a home of their own. We will enhance the scheme to better support families in their journey towards home ownership. And the Minister for National Development will share more at the COS.
  5. 224 Another effective intervention is the KidSTART programme, which taps on a network of community partners to provide upstream support for eligible families with young children. Under KidSTART, parents and caregivers are guided to support their child’s development at home, in the community and in preschools.
  6. 225 KidSTART is on track to support 5,000 children by 2023. Thereafter, we will scale up nationwide progressively to support even more eligible families.
  7. 226 To complement KidSTART, we started an UPLIFT Community Pilot to strengthen support for school-going children in disadvantaged families. This includes connecting them with social service agencies and befrienders who check in with them regularly and provide mentorship.
  8. 227 The pilot has yielded positive outcomes, with school attendance improving for most of the students placed on the programme. So we will expand the pilot into a nationwide UPLIFT Community Network to benefit more students, starting with eight additional towns this year, and more in the coming years.

Integrate Social Service Delivery

  1. 228 As our agencies develop more schemes to help different segments, there is a need for closer coordination and integration across these different services.
  2. 229 The challenges faced by lower-income families are often multi-faceted and inter-connected. For example, a child could be absent from school because of employment or health issues faced by his or her parents. In such cases, it is not enough to provide financial assistance. We also need to address the underlying issues faced by the family and support them in taking steps to achieve sustainable change.
  3. 230 We will therefore integrate the delivery of our social services to more effectively uplift lower-income families. We will do so as we scale up Community Link, or ComLink, which provides targeted support for families with children living in rental housing. This involves taking a family-centred approach to address each family’s challenges so that they can keep their family situations stable, become self-reliant, and eventually achieve social mobility.
  4. 231 We will partner each ComLink family to develop an action plan that is customised to address their specific needs and aspirations. Each family will have dedicated and trained befrienders to support them towards achieving their action plans. And these befrienders will be the bridge with other community partners and Government agencies so that families can receive timely and holistic support.
  5. 232 The Minister for Social and Family Development will share more at the COS.

Prepare for Future Healthcare Needs

  1. 233 Let me now return to healthcare, which is a critical priority for Singapore’s future. We have made heavy investments in healthcare over the years. For example, we have added five new polyclinics and doubled the number of beds in community hospitals in the last decade. To encourage ageing in place, we have injected a significant supply of aged care services, especially in home and community care.
  2. 234 We have improved the quality of care while keeping our healthcare affordable and accessible for all. And we have achieved better overall healthcare outcomes, with Singaporeans living longer and healthier lives.
  3. 235 But there are challenges ahead. As one of the fastest-ageing nations in the world, our healthcare costs will increase significantly. Government healthcare expenditure has already tripled from $3.7 billion in 2010 to $11.3 billion in 2019. If our current healthcare spending, excluding COVID-19-related expenditure, continues to increase at a similar rate over the coming decade, we will spend about $27 billion or around 3.5% of GDP by 2030.
  4. 236 Now, the Government can and must spend more on healthcare for Singaporeans. But the current trajectory of increase is not sustainable. We therefore need to fundamentally rethink the way we deliver healthcare.
  5. 237 An important aspect of this is to bring care closer and make it more accessible to the community. A strong primary care sector will serve as the bedrock of our healthcare system, and allow us to go upstream for preventive care and better manage chronic conditions. This can improve our quality of life and reduce the risk of costly downstream complications. It will also enable our hospitals to focus on complex conditions and emergency cases.
  6. 238 Our healthcare ecosystem must therefore be restructured over the longer term to centre the healthcare system around the patient. It must be designed to keep patients healthy, and provide care in the most appropriate setting. For example, patients with diabetes will require dietary and lifestyle changes to manage the condition well. These are best coordinated by a trusted primary care doctor.
  7. 239 So to do all these, we will need to build closer partnerships between our healthcare clusters and community partners, particularly with the GPs. We will also need to integrate our healthcare IT systems so that information can flow beyond hospitals to community healthcare providers, to enable quality care and maximise convenience to patients.
  8. 240 We are thinking through this “Healthier SG” strategy carefully. It will entail a review of our resourcing approach and healthcare financing schemes, as well as the need for more upstream investments in preventive healthcare.
  9. 241 This will be a challenging long-term effort involving many components and stakeholders. But if we succeed, we will be able to use our resources more effectively while providing quality care and enabling Singaporeans to stay healthy.
  10. 242 Another aspect of healthcare that has been brought to the fore during the pandemic is mental health. The pandemic has been a stressful period for Singaporeans. But the issues of mental health that we face are not caused only by COVID-19. We want to make sure that the lessons learnt are embedded into our healthcare and social support system, in a sustainable and permanent manner. Therefore, we have established an Interagency Taskforce on Mental Health and Well-being to coordinate efforts across public agencies and other stakeholders, and to enhance and integrate mental health and social services in the community.
  11. 243 Sir, we have a full agenda for healthcare, and the Minister for Health will elaborate on the plans and strategies at the COS.

Caring and Inclusive Society

  1. 244 Beyond healthcare, we have, over the last decade, made progress in ensuring that Persons with Disabilities or PwDs lead dignified lives and are empowered to fulfil their potential across different life stages.
  2. 245 We supported them through their early and schooling years with Early Intervention programmes and Special Education schools. We built inclusive playgrounds across the island so that children with special needs can play with their peers. Through SGEnable, the employment of PwDs has increased and workplaces have been made more inclusive to cater for the needs of PwDs.
  3. 246 We will continue to do more for this group. Later this year, we will launch the Enabling Masterplan 2030 to further strengthen support in areas like employment, lifelong learning, and respite care.
  4. 247 The community plays a critical role in building a caring and inclusive home. Through the course of the pandemic, we have seen an outpouring of generosity, kindness, and support from Singaporeans. Donations received at Giving.sg, an online donation portal, last year increased by nearly threefold to around $100 million.
  5. 248 I will build on this momentum to strengthen the culture of giving in our society.
  6. 249 To provide more support for the charity sector and to encourage giving, I will provide a top-up of $100 million to extend the Government’s support for Tote Board’s Enhanced Fund-Raising Programme for three years until end-FY2024. Charities can apply to receive dollar-for-dollar matching for eligible donations, up to a cap of $250,000 per charity every year. (See Annex E-4.)
  7. 250 Earlier we had established the Community Capability Trust, to strengthen the capabilities of Social Service Agencies. I will provide similar support for charities. I will therefore provide a top-up of $26 million to the Charities Capability Fund for five years. This will help to nurture a more productive and innovative charity sector and enable them to do more for the community. (See Annex E-4.)
  8. 251 I will also continue to support our Arts and Sports sectors. The Arts and sports provide meaningful outlets for self-expression and discovery. They help to strengthen our shared culture and our sense of identity, and unite us as one people.
  9. 252 Last year, all of us cheered our Olympians and Paralympians as they flew the Singapore flag high in Tokyo. To strengthen our High Performance Sports ecosystem, I will extend the One Team Singapore Fund for another five years. This will provide dollar-for-dollar matching for donations to rally support for our Team Singapore athletes.
  10. 253 To further encourage cultural philanthropy, I will provide a top-up of $150 million to the Cultural Matching Fund for three years, which provides dollar-for-dollar matching for donations made to Arts and Heritage charities.
  11. 254 Mr Speaker Sir, I have outlined some of the key moves that the Government will make to strengthen our social compact. We will continually review every aspect of our social policies to see what needs to be further adjusted and improved. This is a major multi-year agenda, to strengthen our solidarity with one another, as we prepare Singapore for the next bound.