National Day Rally 2019 has exposed Singapore’s vulnerabilities. Here are our key takeaways.
Singaporeans would remember past National Day Rallies for the promises of more paternity leave, cash gifts (coupled with promises of higher GST in the near future), baby bonuses, cheaper healthcare and other benefits for our Pioneer and Merdeka Generations, and more recently, some safeguards for the value of our HDB flats.
Improved preschool subsidies, tertiary bursaries, and CPF contribution rates
This year was no different. There was plenty of good news for parents with school going children and working seniors, during Prime Minister Lee Hsien Loong’s National Day Rally speech held at the Institute of Technical Education (ITE) College Central in Ang Mo Kio.
The income ceiling for families looking for additional preschool subsidies will be raised from $7,500 to $12,000. This would allow another 30,000 families to qualify for means testing. The quantum of preschool subsidies is also set to increase, though no further details were given at the rally. Government supported preschool places are also set to increase, from 50% of current places to 80% in future, as government spending on early childhood education will double from the current $1 billion spend.
Annual fees for full-time general degrees at the Singapore Institute of Technology (SIT) and Singapore University of Social Sciences (SUSS) will be reduced from $8,000 to $7,500. Bursaries for university general degrees would increase from 50% to 75% of course fees, while that of polytechnic diploma courses would increase from 80% to 95% of course fees. This will also include government-funded diploma and degree courses at ITE, the Nanyang Academy of Fine Arts (NAFA) and Lasalle College of the Arts. Medical degree bursaries would be enhanced even further so medical students from lower income families need only pay $5000 annually in course fees.
For working seniors, this next one is for you. In 2022, the retirement age will be raised from 62 to 63 and the re-employment age will be raised from 67 to 68. By 2030, PM Lee, expects to raise them to 65 and 70 respectively. CPF contribution rates are also set to increase for those between 55 and 60 years of age, starting from 2021. Over a 10-year period, CPF contribution rates for this group will eventually be raised to 37%, on par with younger workers. CPF withdrawal policies will remain unchanged.
Impact of US – China trade tensions
But this year’s NDR was very different in other ways, and not just because of its obvious lack of immediate monetary rewards, in what many people think is building up to be a general election year.
PM Lee took a sombre tone as he spoke about the trade tensions between the U.S. and China, and how Singapore has been caught in-between. He highlighted that the two economic superpowers need to develop a cordial and mutually beneficial working relationship, amid the competition, by building mutual trust when in managing conflicts. Unfortunately, PM Lee said, there is currently no magic elixir that could provide a quick fix to the current trade tensions.
These tensions will affect the global economy, including Singapore.
PM Lee noted that Singapore’s economy remains weak, in the light of falling global demand and international trade which impacted its manufacturing and trade-related services sector. The decline in the electronics sectors – particularly in the precision engineering and wholesale trade segments – created a drag on the entire economy. The retail sector also remained subdued in the light of growing e-commerce, he added.
However, as retrenchment and unemployment rates remain stable, there is no need for the government to step in with a stimulus package currently. But, PM Lee says the government will not hesitate to take appropriate measures to protect people’s livelihoods if the situation gets worse.
Acknowledging climate change and its implications
More poignantly, PM Lee took the opportunity to address the reality of climate change, its impact on the country, and what the country needs to do to survive through it.
“What is climate change? What is it about and why should we be concerned?,” PM Lee said rhetorically. “Human activity is pumping more and more carbon dioxide (CO2) into the atmosphere. We produce CO2 when we drive a car or take a plane, or run a manufacturing plant, or use electrical appliances at home[..] The CO2 builds up in the atmosphere, traps heat from the sun, and causes the planet to warm up.”
“Singapore is already feeling the impact. Our weather is palpably hotter. Rainstorms are heavier. And this will very likely worsen over the next few decades, within the lifetimes of many of us.”
To mitigate climate change, PM Lee said that Singapore had joined international efforts to reduce emissions as a part of the Paris Climate Agreement. Individual Singaporeans also have to play their part through switching off the lights, reducing waste, and reusing and recycling.
“Our landfill is at Pulau Semakau (Semakau Island). But that will eventually fill up, and then we will need Bukit Semakau (Semakau hill), and then Gunung Semakau (Mount Semakau)!” PM lee said jokingly.
In a doomsday styled animation, PM Lee showed how the island nation would be affected by climate change and rising sea levels. In order to protect the low lying areas, PM Lee proposed building polders to extend the existing coastline, or reclaiming the offshore islands from Marina East to Changi to create another fresh water reservoir. PUB also plans to build a second pump house, similar to the existing Marina Barrage to pump water out of the Marina Reservoir into the sea, protect the city areas during heavy rain at high tide.
PM Lee estimated that the cost of protecting the country from climate change would be upwards from $100 billion, and would span the next 50 to 100 years. He likens this to the cost of maintaining the Singapore Armed Forces (SAF) which are an essential part of the nation’s defence.
“Both the SAF and climate change defences are existential for Singapore. These are life and death matters,” said PM Lee. “Everything else must bend at the knee to safeguard the existence of our island nation.”
“There is one difference between the two. With the SAF, we hope never to go to war. If you have a strong SAF, you may deter threats and avoid having to go to war. But with climate change, we know for sure sea levels will rise. The only uncertainty is whether they rise a few decades earlier, or a few decades later.”
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