5 Citizen Population Scenarios - NPTD

Population will shrink from 2025 without new citizens

Pool of working age citizens will also drop steadily from 2.1m today
By Phua Mei Pin, The Straits Times, 25 Apr 2012

SINGAPORE needs 20,000 to 25,000 new citizens each year to prevent a decline in its citizen population from 2025, new government projections show.

That assumes no big uptick in the number of Singaporean babies born here. The Total Fertility Rate (TFR) is now 1.2, one of the lowest in the world.

If it stays put, and the door to new migrants is shut from this year, the citizen population will start shrinking in 13 years' time.

The pool of working age citizens will also drop steadily from today's 2.1 million to about 1.5 million in 2060.

These are some of the five scenarios in a paper that the National Population and Talent Division (NPTD) released yesterday.

As the lead agency for the Government on population matters, it is conducting a comprehensive examination of population goals and policies, Deputy Prime Minister Teo Chee Hean announced during the Budget debate.

The NPTD is releasing information to spur study and discussion in the lead-up to a White Paper on population matters, due by the year end.

It has launched focus group discussions with different segments of the community. From the middle of the year, it will engage the public through various avenues, including dialogues and online channels, to discuss population issues holistically.

'Through this process, we hope to bring to light issues that are important to Singapore and Singaporeans, and develop a shared understanding of our strategies to build a sustainable population that secures Singapore's future,' it told The Straits Times via e-mail.

The five scenarios drawn up by NPTD, using data from the Department of Statistics, are based on the following assumptions:

- TFR rises to 2.1

- TFR stays at 1.2 and the number of new citizens each year is zero, 15,000, 20,000 or 25,000.

A comparison shows that only with an annual injection of 20,000 to 25,000 new citizens a year can the citizen population size be kept at a constant level of four million. In all other scenarios, the total number of citizens will dwindle.

From 2007 to 2010, Singapore's intake of new citizens ranged from over 17,334 to 20,513. Last year saw 15,777 additions to the citizen population.

A key point from the paper is that, regardless of which scenario comes to pass, Singapore's citizen population will continue to age. In the best-case scenario, median age rises from 39 in 2011 to 42 in 2060. In the worst case, it jumps to as high as 55.

From now to 2030, Singapore will also see 'an unprecedented age shift, as over 900,000 baby boomers will retire from the workforce and enter their silver years', NPTD said in the paper.

Commenting on NPTD's scenarios yesterday, Associate Professor Kalyani Mehta, the head of SIM University's programme for gerontology, pointed to the Retirement and Re-employment Act as a measure that can impact the size of the working population.

'It remains to be seen how much we can improve our labour force productivity. Getting people such as housewives back into the workforce is another strategy that has to be factored in.'

Demographer Gavin Jones noted the paper's silence on the future permanent resident population.

'To become a citizen, you pass through a process of being a PR first. New citizens are drawn from that pool and you do need to look at that aspect,' he said.

Last September, the Institute of Policy Studies drew up 48 scenarios on the resident population, which includes citizens and permanent residents.

Its conclusion: If net migration was zero, the resident population would start bottoming out in 2025, dropping to three million by 2050.

Yesterday, the NPTD also stressed that the Government takes care to accept immigrants who are able to integrate well into Singapore society.

From 2001 to 2010, 49 per cent of new citizens were from South-east Asia, 42 per cent from other parts of Asia and the remaining 9 per cent from other parts of the world.

From 2005 to 2010, about 55 per cent of new citizens were aged 30 or younger.

Members of the public may access the paper and give their comments at www.nptd.gov.sg

Two working-age citizens to support one elderly by 2030

By Goh Chin Lian, The Straits Times, 25 Apr 2012

A CHILD in kindergarten today will shoulder a heavier burden of supporting the elderly when he enters the workforce in 2030, even if Singapore takes in more new citizens than it does now.

Only two people like him will support each elderly citizen, instead of the six now, said the agency overseeing the country's population policy.

This could mean that tomorrow's workers may have to pay higher taxes to support higher government spending on the aged, while older people will have to work longer, warned experts.

'The shrinking working-age population and increasingly aged population will result in a deterioration of the citizen old-age ratio,' warned the National Population and Talent Division (NPTD) in a paper outlining five scenarios of Singapore's citizen population in the next few decades.

Its report defines the working-age population as those aged 20 to 64 years old, and the elderly as 65 years old and above.

Experts fear that a declining old-age support ratio will mean dropping tax revenues from citizens just as spending for the elderly goes up. Official estimates project health-care spending to rise from 2 per cent of gross domestic product in 2016 to around 3.5 per cent by 2030.

All five of the NPTD's scenarios paint a stark future: A sharp plunge from the current ratio of 6.3 working-age citizens for every elderly citizen.

At its worst - without immigration - 2.1 working-age citizens will have to support each elderly person in 2030, and 1.4 in 2060. If 25,000 new citizenships are given out a year - 5,000 to 7,000 more than the current immigration rate - the ratio will drop a little less drastically, to 2.4 in 2030 and 1.9 in 2060.

But while the NPTD concluded that immigration has a 'mitigating effect' on the old-age support ratio, experts cautioned that it is a short-term solution.

They note that higher immigration rates will place a greater burden on housing, transport and other infrastructure, which Singaporeans may not accept.

'Immigration alone would not provide a long-term solution to the fiscal burdens, even though it does have an immediate fiscal benefit,' said National University of Singapore economist Chia Ngee Choon. 'The question is whether the current policy of taking in 20,000 new citizens is sustainable.'

The declining old-age support ratio is a problem that many other countries also wrestle with.

According to an Organisation for Economic Cooperation and Development (OECD) report last year, South Korea's ratio is projected to drop from 6.1 in 2009 to 1.5 by 2050, and China's, from 8 to 2.5 roughly over the same period. Japan's ratio was already at 2.6 in 2010, and Germany's, below 3.

Japan is trying to raise its consumption tax, while Germany is proposing a 'demographic reserve' levy on those over the age of 25 to pay for a surge in social security costs.

But Singapore cannot raise income or corporate taxes too much if it wants to stay tax-competitive, Associate Professor Chia pointed out, though raising consumption or green taxes is one option.

SIM University economist Randolph Tan noted that older people will want to keep working longer to reduce the burden on their children.

Still, the future may not be all gloomy for the young. Smaller family sizes mean they are more likely to inherit their parents' property, noted Nanyang Technological University economist Tan Khye Chong.

'They may not have to worry about housing. They can use their income to support their parents, who give them a house to stay. People will have to change their mindset that their children have to buy a new house.'

For a population with bounce
Editorial, The Straits Times, 2 May 2012

THE thrust of demographic scenarios prepared by the National Population and Talent Division (NPTD) for public comment is not new to Singaporeans. Many would acknowledge that something must be done to reverse the effects of stubbornly low birth numbers. Otherwise, economic vitality will wane, revenues will decline, budgets will tighten and the quality of life may be affected. But consensus has yet to form on how the population is to be boosted and how to cope with the inevitable social pressures arising. The NPTD says an addition of 20,000 to 25,000 new citizens is required each year to prevent a net population loss that could happen within about a dozen years. Last year, about 16,000 permanent residents were granted citizenship.

Parallel with the publication of a White Paper on Population towards the end of the year, there should be a thorough venting of issues on what a sustainable population size over the long term should be. Every Singaporean has a stake in the kind of society and living environment he wants, so Singaporeans should speak their minds.

Besides the old standby of naturalisation, there is also the possibility of attracting back Singaporeans who have emigrated. The best available estimate of the diaspora is 190,000. If only a small percentage of emigres can be persuaded to resume life here, it could make a difference to the population composition. Their children who have completed tertiary studies would make ideal targets for career starts here and eventual assimilation as resident Singaporeans, if they marry here. People have left for all manner of reasons. Policy changes over the years in education, employment opportunities, gender equality and the opening up of political space could tilt the balance for doubters.

But making naturalised citizens of PRs is, for practical reasons, still the preferred approach. There is an ample base of 530,000 PRs to draw on even as new approvals are falling after criteria were tightened in 2009. The number of new PRs has been halved from 60,000 to under 28,000 a year. Among the oddly named 'non-resident population' are another half a million employment and S pass holders, their dependants and international students. A number of them will proceed to be PRs.

Given the alarming decline in birth rates and the rapid ageing of the population, to argue that Singapore should not remain open to newcomers would be perverse. That would be an ironic turn of events for this society of immigrants. Instead, the focus of the debate should be on forging consensus on how many more to add, and the pace at which this can be done.

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Citizen Population Scenarios