Monday, August 20, 2007

Aging Population- The main concern of PM Lee

At this year National Day Rally Speech, Prime Minister Lee Hsien Loong has unveiled a series of comprehensive strategies to tackle Singapore income gap widening problem. The most attention grabbing strategy is the one percent interest hike on first $20 000 of ordinary account and on a total of $60 000 in special, retirement and medisave accounts. This is a bold move by the government to tackle Singapore income widening gap problem. The start up of this programme will cost the government $700 million and much more as interest compound. This would provide incentive for Singaporean to put more money in their CPF account and provide a bigger nest-egg for their old age.

Housing grant will also be increase from $20 000 to $30 000 to help low income-earner to buy HDB flat. This will cover half of Singapore households. To ensure Singaporeans particularly the low income group has enough to survive in their golden years, compulsory annuities will be introduced.

In attempt to cope with Singapore rapidly aging population, the government will pass a law under which, from 2012, workers reaching the retirement age of 62 will be offered re-employment till 65 and eventually till 67. To encourage employers to do so, Workfare Income Supplement could pay 20% of the salary of a 60 year old who earns $1000 a month- up from 10%.

Another key area that will underpin the government strategy is education. A fourth university will be built to raise the quality of our workforce for the next generation. He mentioned that payoff of education is going up and the best way to reduce income gap. The fourth university will be ready by latest 2011 according to our Minister of Education. This will create 2400 additional places and it will have its own unique strengths and character.

Estate renewal have been brought up again in this year National Day Rally Speech Singaporeans speech but this time much of the focus is on private estate. Funds will be allocated to private estate to make enhancement as the community deem fit.

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