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Among highlights was the new Majulah Package, which comprises an "earn and save" bonus for those in their 50s and early 60s to build up their CPF savings while working.
Prime Minister of Singapore Lee Hsien Loong delivered his National Day Rally 2023 (NDR 2023) speech on 20 August 2023, in which he highlighted Singapore's plan in the coming years.
Opening his speech, PM Lee shared: "Having come through COVID, we are once again being tested. The international environment is fraught with geopolitical tension and economic uncertainty." He particularly cited geopolitical tensions between China and the US, and the war between Russia and Ukraine as an example. At the same time, the global economic order is fraying — globalisation is weakening and supply chains are splitting up. In response, countries are layering on multiple protectionist measures which hurts all countries, but especially small, open trading nations "like Singapore".
Lastly, extreme weather due to global warming is impacting food production and prices worldwide.
He reassured, however, that economically, Singapore is keeping up, with positive economic growth expected this year. At the same time, inflation is at last coming down, but will likely stay higher than what Singapore is used to.
PM Lee also highlighted plans, under the Forward SG Exercise, that will include financial support for workers who lose their jobs, while they upgrade their skills. "It will be a temporary safety net to help you meet immediate needs, to free you to upskill and train, as you prepare yourself for a good long-term job," he affirmed.
Against this backdrop, he emphasised the importance of navigating carefully in such an increasingly troubled landscape. Sharing the plan moving forward, he touched on five different spheres.
Retirement
Addressing a major area of worry, PM Lee understands that financial concerns are top-of-mind not just for younger workers, but also the older ones. These concerns, he noted, become more urgent as they approach retirement.
For those in their 50s and early 60s, who he referred to as "young seniors", PM Lee acknowledged plight of being in a "unique position today" and "a particularly sandwiched phase" of life: "You have to shoulder the responsibility of caring for both the young and old in your families. Your kids may be young adults, but often are not yet fully independent and still live in the same household. Many of you young seniors also have elderly parents at home, who may be beset with the infirmities of old age. You have to shuttle them to medical appointments and hospital visits, plus attend to their everyday needs. All this, while watching your own health, because you are not so youthful yourselves," he explained.
Keeping in mind the burden of responsibilities on all these fronts, along with the daily cost of living pressures, PM Lee introduced the Majulah Package to help this group meet their retirement needs. This will be for Singaporeans who are 50 and above this year (born in 1973 or earlier) and will benefit those with lower incomes and less wealth. The support will be tiered, depending on income and CPF savings. The Majulah package will comprise three components:
First, an "earn and save" bonus. This will help senior workers in this group build up their CPF savings while working while they have some years to go before retirement. Lower- and middle-income workers will get a CPF bonus of up to S$1,000 a year, depending on their income. This will be credited into the CPF account, on top of the usual employer and employee contributions. Young seniors will receive this earn and save bonus yearly, as long as they are working, whether full-time or part-time.
Second, a retirement savings bonus (RSB). For those whose CPF balance has not reached the CPF Basic Retirement Sum, they will receive a one-time CPF bonus of up to S$1,500. Those who are not working will also get this bonus – including homemakers who may have left their careers early and thus have lower CPF balances.
Third, a MediSave bonus. PM Lee shared: "Most young seniors have enough MediSave balances. Nevertheless, many still worry about healthcare costs as they grow older. As such, the Majulah Package will include a modest one-time MediSave bonus of up to S$1,000. This serves as some extra buffer to help pay medical expenses and insurance premiums."
While this will help young seniors in their 50s and early 60s, the Majulah Package also covers the Pioneer and Merdeka Generations, as Singapore's way to encourage older seniors to continue working for as long as they can, PM Lee added.
Those in the Pioneer and Merdeka Generations will also receive the Earn and Save Bonus as long as they are still working and meet the income criteria. At the same timehose who are not working can still get something from the one-time Retirement Savings Bonus and MediSave Bonus. This will be in addition to the existing benefits that they are already receiving and will continue to receive.
With all of these initiatives, the Majulah Package will cost the Government about S$7bn and benefit some 1.4mn older people across several generations. PM Lee said the Ministry of Finance will create a new fund to meet the full lifetime costs of the package, using resources from this term of Government.
Singapore will also be enhancing existing schemes, such as the Silver Support, Workfare, and the Matched Retirement Savings Scheme, with details to be announced next year.
Ageing
According to PM Lee, Singapore is one of the fastest-ageing nations in the world — today, about one in five Singaporeans is a senior, aged 65 and above. By 2030, nearly one in four Singaporeans will be a senior.
"Today, we are an aged society; soon, we will be a ‘super-aged’ society. This has massive social and economic implications. We have much to do to help our seniors age well."
PM Lee elaborated further on two aspects of Singapore's preparations: active ageing; and making homes and precincts more senior-friendly.
Active ageing
The Ministry of Health launched Healthier SG earlier last month, with the aim to get Singaporeans to take more responsibility for their own health, supported by family doctors and community partners.
Besides encouraging active ageing through initiatives such as the Active Ageing Centres, Singapore is also working on making HDB homes and precincts more senior-friendly. Currently, under the EASE programme (Enhancement for Active Seniors), seniors can install fittings like ramps to help them get in and out of their homes. Soon, seniors can choose from an expanded suite of fittings under EASE 2.0, such as have foldable shower seats or having their toilet entrances widened for example.
Second, there will be more efforts to make it safer and more comfortable for seniors to move about their neighbourhoods. For example: streets and linkways frequented by seniors will be revamped. The roads will also be made more pedestrian-friendly — this would include longer green man signals to give seniors more time to cross the road. There will also be larger and more colourful block signs installed, with familiar symbols to help seniors remember their own block and find their way home.
Last, the Government will also build more assisted living facilities for those who need a little more help, such as the Integrated Dementia Assisted Living (IDeAL) project in Kebun Baru. It is a ground-up project by Dementia Singapore, with some Government support, to help seniors with mild dementia. It incldues a void deck for these seniors to exercise and interact, and shared facilities there such as a community kitchen and a telehealth room, where staff can monitor their vital signs and arrange for telemedicine checkups.
"Singapore is taking major steps to prepare for a super-aged society, part of a new national programme called “Age Well SG”, which will complement Healthier SG in improving the health of seniors. The Ministries will share more about this in the coming months," PM Lee shared.
Housing
Amidst an evolving housing in Singapore, PM Lee shared more focus on the longer-term public housing landscape, starting by distinguishing between mature estates and non-mature estates.
Mature estates are usually more centrally located, better connected, and with more amenities, prices reflect the higher demand. Non-mature estates are less central, perhaps losing in terms of location and convenience initially, but making up for in lower BTO prices, the PM said. This distinction, he added, has "worked well for many years."
However, the housing landscape is evolving. As explained, firstly, there are fewer and fewer large tracts of undeveloped land left to build new towns and estates. Increasingly, Singapore will have to build new HDB flats within or near to existing estates. These will often be more centrally located. For example, the Government is planning to build 5,000 new homes at Mount Pleasant. New projects like these – nestled in older, more developed areas with a lot more amenities – will be more popular and will naturally cost more. Secondly, even what is being called “non-mature estates” today have become much more developed.
With this, the distinction between mature and non-mature estates is blurring. This means that the framework of mature and non-mature estates will no longer work, and there will be a need for a new framework. This framework has to achieve three important objectives, the PM highlighted:
- It has to keep home ownership affordable to all income groups.
- It has to maintain a good social mix in every town and every region.
- It has to keep the system fair for everyone.
Singapore plans to do so in the following ways.
For a start, HDB flat prices will be kept affordable. The Government will gradually provide more housing grants, especially grants that are means-tested, such as the enhanced housing grant. This way, lower- and middle-income households will get the most support to own their homes.
While this will work for most HDB projects, PM Lee acknowledged that it still leaves one particular problem — projects in choicer locations within a region. For example, projects near an MRT station or near the town centre. With such flats seeing the highest demand during BTO exercises, it poses a dilemma on whether these projects should be priced higher or lower. As the leader summarised: "Under the present framework, whether we price such flats higher or lower, we cannot fully achieve all three objectives: affordability, a good social mix, and a fair outcome."
The solution, he elaborated, is to introduce a new “Plus” model for selling HDB flats at choicer locations, with stricter sale conditions so that the Government can moderate the prices. To explain, as HDB launches BTO projects all over Singapore, some HDB projects will be in choicer locations within each region. HDB will give more subsidies for these Plus flats, over and above the subsidies for Standard BTO flats. This will moderate the prices of Plus flats and put them within reach of more households.
Still, HDB will also impose more restrictive sale conditions to make the scheme fair, such as a longer minimum occupancy period of 10 years for example. This favours buyers who are planning to stay there for the longer term, and discourage those who may be thinking of flipping the property and moving out as soon as they can. There will also be tighter restrictions when the homeowner resells the Plus flat later on, such as a subsidy recovery applied on the resale price. Also there will be an income ceiling on resale buyers, similar to that on first-time buyers. This will moderate resale prices and help to maintain a better social mix, even in the resale market in the longer term.
According to PM Lee, this Plus model aims to meet Singapore's three objectives: affordability, good social mix, and fairness. The Plus model is also not entirely new as there is already something similar, called the Prime Location Public Housing Model.
"So, think of it like this. Standard flats are good flats built all over Singapore and will have HDB’s standard subsidies and standard restrictions. Plus flats are in the choicer locations within a region, and will have more subsidies and tighter restrictions than Standard flats. And Prime flats are in the choicest and most central locations in the whole of Singapore, and they will have the most subsidies and tightest restrictions."
HDB will roll out this framework for all new projects from the second half of next year. It will not affect existing projects, and current homes, or the homes buyers have already booked, will not be reclassified.
In time to come, Singapore will no longer refer to new projects as mature and non-mature. Instead, we will build a good mix of projects within and across regions, to cater to different needs and budgets.
Apart from the above, PM Lee also touched on efforts to enhance access to housing for singles. Today, first-timer singles can apply for new flats, but only two-room Flexi flats and only in non-mature estates. They are not able to buy new flexi flats in mature estates, or prime flats.
As Singapore rolls out the new framework, singles will be allowed to buy two-room Flexi flats across all types of BTO projects – Standard, Plus, and Prime. HDB will release further details soon.
PM Lee ended his speech by confirming that his initial succession plans to step down as Prime Minister by 2022, which were disrupted by the pandemic, is back on track.
"More and more, my task is to support the 4G team and their agenda. I want to get them off to the best start possible. They are increasingly setting the pace. My themes in this rally are all Forward SG theme."
Reactions to NDR 2023
Following the speech, NTUC Secretary-General Ng Chee Meng expressed his thoughts: "Over the years, NTUC Singapore has been advocating an increase in CPF rates for older workers, enabling them to continue building their retirement nest egg, as well as advocating for raised retirement and re-employment ages, allowing our senior workers to choose to work longer. The Majulah Package will provide a boost to their savings, assisting them with their retirement needs.
"Through the NTUC-SNEF (Singapore National Employers Federation) Taskforce recommendations in 2021, we called for unemployment support to provide short-term interim assistance, helping unemployed workers tide over the period as they seek employment or undergo training. A scheme that offers temporary financial support for workers who are retrenched while they participate in training was also announced earlier this evening. We are grateful that the Government will soon be introducing such a scheme. This will give retrenched workers greater assurance and assistance when they need it most."
On the support for older workers, NTUC Deputy Secretary-General Heng Chee How added: "Enhancing support to our older workers who have contributed to our nation-building over the years will help them to have more adequate savings to meet retirement needs. Let’s build a stronger social compact where we will all come together, jon hands and chip in to ensure no one is left to fend for themselves.
“These additional arrangements will no doubt bring concrete benefits to our older workers, giving them more assurance and confidence in their retirement adequacy.”
Lead image / Prime Minister's Office
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