Wednesday, 6 February 2013

DPM Teo Chee Hean's parliamentary speech on Population White Paper

Opening speech by Deputy Prime Minister, Coordinating Minister for National Security and Minister for Home Affairs Mr Teo Chee Hean at the Parliamentary debate on Population White Paper, 4 Feb 2013


1. Madam Speaker, I beg to move: That this House endorses Paper Cmd. 1 of 2013 on “A Sustainable Population for a Dynamic Singapore” as the population policy roadmap to address Singapore’s demographic challenge and Paper Misc. 1 of 2013 on “A High Quality Living Environment for all Singaporeans” as the land use plan to support Singapore’s future population.

2. Since March 2012, we have engaged over 2,200 Singaporeans and representatives from various groups, and also received 2,500 pieces of feedback on this important issue of population. All Members of this House were also invited to send in their views and suggestions.

3. Since we released the White Paper on 29 January, much of the attention and public reactions have been focused on the population projection for 2030. Singaporeans have expressed concerns over job competition, having too many foreigners, and overcrowding. Many have asked whether we should do more to encourage marriage and parenthood and slow down our pace of life. These are all heartfelt and important concerns which Singaporeans have today, and which we also worry about for our future.

4. Indeed, these were the issues which we grappled with as we prepared the White Paper. Allow me to take a step back, Madam, and focus on why we have prepared the White Paper, the objectives and the balance that we are trying to achieve.


5. We faced a series of unprecedented crises in the last decade: 9/11 in 2001, SARS in 2003, and the global financial crisis of 2008. They caused wide swings which required extra-ordinary responses to cushion the impact on Singaporeans. By working together, we kept our society cohesive, stabilized the economy, saved Singaporeans’ jobs and emerged stronger as a community. However, the responses we took threw our planning out of gear.

6. In particular, the growth in foreign workforce, total population, infrastructure and housing were not aligned. This contributed to the anxiety, crowdedness, integration problems, and the daily inconveniences faced by Singaporeans today. To address these issues, individual ministries have been taking steps to reduce the intake of PRs, tighten on foreign workers, boost housing supply and improve transportation. But we now needed to review all these holistically.

7. The White Paper therefore sets out to take a re-look at all these issues, balance the different needs and constraints, and chart a roadmap to guide future policy. The White Paper is fundamentally for the benefit of all Singaporeans – ourselves, our children, and their children. To make sure that Singaporeans continue to live in a harmonious society, with strong supportive families, good jobs, and a good living environment.

8. We looked at our past population and workforce trajectory, and concluded that we could not continue growing at those rates. Over the past three decades, our total population had been growing at an average of 2.5% per year, and our workforce at 3.3% per year. These growth rates were simply not sustainable for the coming years, because our foreign workforce and population would increase beyond our constraints.

9. I would like to emphasise two points at the outset.

10. The first point is that the White Paper is proposing a major shift – a significant slow-down in our rate of workforce and population growth compared to the path that we were on. Up to 2020, we will be slowing down the rate of workforce growth to 1% to 2%. This is half of what it was before. Beyond that, the White Paper projects a further reduction to about 1% per year. This is a significant reduction, just a third of what it was before. Population growth rate is also projected to drop to about half the historical growth rate. I will go into this in more detail later in my speech.

11. Up to 2020, the roadmap in the White Paper is clearer. But beyond 2020 till 2030, the projection has a wider uncertainty range of 6.5 to 6.9 million.

12. This is the second point I would like to emphasise. We are not deciding now on the population trajectory beyond 2020. Nor are we deciding that we will have a population of 6.9 million in 2030. We are using this figure (which is at the high end of the 6.5 to 6.9 million range) only to prepare infrastructure plans.

13. This population range up to 2030 provides a common set of parameters so that we can make long term plans that will be sufficient to cater even to the high end of possible populations. This is especially important for infrastructure plans that may take many years to implement, and once built will be there for decades. If we underprovide in our Land Use and infrastructure plans now, Singaporeans will have less flexibility in the future, and if things turn out unexpectedly, we will face bottlenecks and constraints. In fact, these are precisely the problems that we are facing today. We do not want to repeat these scenarios by under-providing.

14. What the population will actually be in 2030 will depend on the needs of Singaporeans, and the decisions we make on economic and workforce policy along the way. We hope that with restructuring and productivity gains, with Singaporeans living healthier and longer and therefore choosing to remain in the workforce longer, and more women joining the workforce, our population will not reach 6.9 million. It is the ability to meet the needs of Singaporeans and provide a good quality of life that is the driver. That is our objective, and not the numbers per se. If we are able to achieve this with a smaller population, whether 6.5m or lower, there is no reason to go higher. But it is prudent to plan our infrastructure for the upper end of the range, so that we do not get caught out.

15. Furthermore, this is not a one-off exercise. Every few years, we should look at our plans again, decide the path we actually take, especially beyond 2020, and make changes to refine the plan, based on our needs, and as domestic and external circumstances change.

16. Though it is important for me to make these two points at the outset, we have actually jumped several important steps to the outcome. It would be helpful to start at the beginning. And where is the beginning? The beginning is our Singaporean core. During our engagement sessions, as we heard their views and suggestions, hopes and concerns, Singaporeans asked us several key questions. These questions remained on our minds as we developed the White Paper. Let me try to answer these questions.


17. First, is our aging and shrinking citizen population really such an urgent issue? Can’t we just wait a few more years before we deal with it? The issue is indeed upon us, and is an issue we need to deal with now.

18. Last year, our first cohort of Baby Boomers, those born after the Second World War in 1947, turned 65. Between now and 2030, over 900,000 Baby Boomers – or more than a quarter of our present citizen population – will enter their silver years.

19. By 2025, our citizen population will start to shrink if we do nothing. Let me explain what the trends mean. At a Total Fertility Rate of 1.2, for every 100 Singaporeans in this generation, there will be 60 Singaporeans in the next generation, and only 36 in the generation after that. And this poses a huge challenge to the sustainability of our Singaporean core population.

20. What does this mean for the lives of Singaporeans? For our seniors, many will continue to live active, healthy lives. But as age catches up, they and their families will want the assurance that their needs can be met, and that there will be enough care-givers and health workers to look after them.

21. Today, our Singaporean workforce is still growing, slowly. But as our Baby Boomers retire, and fewer school leavers enter the workforce, our citizen workforce will start shrinking by 2020.

22. What does this mean? Today, we have 5.9 working-age citizens for each citizen aged 65 and above. 5.9, so nearly 6. By 2030, this will fall to 2.1, or roughly one-third. This is about half the average of 4.1 for the OECD countries in 2010. We can mitigate this by creating more opportunities for Singaporeans to continue working beyond the current retirement age. But, the support ratio will still fall significantly.

23. What does this mean for Singaporeans? Higher taxes on those working, to fund subsidised healthcare for a much larger number of seniors. Slower business activity and less investment in new sectors leading to fewer job and career opportunities. Young Singaporeans may decide to leave for more exciting opportunities in other growing cities. This would hollow out our population and workforce further. This is a real worry not just on a national level, but for parents too who wonder whether their children will go abroad in search of better opportunities, and they will be left here alone here during their silver years.

24. Take Japan as an example. In 2011, 23.3 percent of Japan’s population was aged 65 years and above – the highest in the world. One statistic jumped out at me. In 2011, for the first time, Japan’s largest diaper maker, Unicharm Corporation, reported that it sold more adult diapers in Japan than baby diapers.

25. Japan moved from an aging population as defined by the World Health Organisation where 7% are over 65, to an aged population where 14% are over 65, in 24 years. This is much faster than Italy, which took 61 years, Sweden 85 years, and France 115 years. So Japan took 24 years. Singapore will age even faster, taking just 18 years to make the same transition. We are projected to be an “aged” population by 2016.

26. Japan’s population started falling in 2005, and is expected to fall by one million people every year in the coming decades. The Japanese population will shrink by around 30 percent by 2060, with 40% above the age of 65. The social and economic implications are enormous.

27. Singapore is a much smaller country with a much smaller population and economy. If we do not take decisive actions now to sustain our Singaporean core population, we will decline more quickly and sharply than Japan.


28. This leads us to our second question: How do we sustain our Singaporean core population?

29. The best and most fundamental way is to encourage Singaporeans to start families. So, regardless of whatever else we do, encouraging marriage and parenthood, bringing up children must remain a key priority. This is not just for tackling our population challenge, but to continue to have strong families, and the fulfilment and happiness that come from having families.

30. We introduced a Marriage & Parenthood Package in 2001. Last month, we announced the latest enhancements to the Package, taking on board the feedback that we received from Singaporeans over the past year. I would like to highlight two changes. Extending MediShield coverage to babies born with congenital and neonatal conditions, reflects the more caring and inclusive society we want to be, and provides important assurance to couples wanting to have children. The introduction of Paternity Leave signals that we should adopt new attitudes and mindsets towards shared parental responsibilities.

31. Since 2001, the families of about 350,000 Singaporean children have benefitted from the Package. The latest enhancements will benefit more families. 

32. However, to support our families, we need the community, employers, extended families and individual Singaporeans to foster a pro-family culture in our whole society.

33. In the short term, I hope our birth rate can increase to at least 1.4 or 1.5, which was our birth rate not so long ago, around the late 1990s and the early 2000s. Beyond that, we would like to see the birth rate rise above 1.5, perhaps to the replacement rate of 2.1, but it will take time, and we will need all Singaporeans to do their part to make it happen.

34. So, to prevent our Singaporean core from shrinking and ageing rapidly, we will need to augment our population with new citizens and permanent residents. A significant number of Singaporeans are themselves marrying non-Singaporeans, reflecting the more globalised nature of interactions between people today. About 40% of Singaporean marriages each year are between a Singaporean and a nonSingaporean, numbering some 9,000 in 2011.

35. Singapore has historically been an immigrant society, and has benefitted from the diversity and energy that new citizens bring. Several colleagues in this House also have close new citizen family connections.

36. We should continue to welcome immigrants who can contribute to Singapore, share our values and integrate into our society. Taking in younger immigrants will supplement the smaller cohorts of younger Singaporeans born since the 1980s, and balance the ageing of our citizen population. Taking in between 15,000 and 25,000 new citizens each year is about equivalent to having a stable and sustainable Singapore citizen core population with a total fertility rate of 2.1. We have in fact been taking in new citizens at this controlled rate, averaging 19,000 per year over the past five years. We will review this immigration rate from time to time, depending on our birth rates, as well as the quality of applicants, and our changing needs. If we are able to raise our birth rates, we can eventually take in fewer immigrants. But a baby born today will only be 20 years old in 20 years’ time.

37. Permanent Residents are also counted as part of our resident population. They form a pool of potential new citizens who have a longer-term commitment to Singapore, but are not yet ready for citizenship. We have tightened up significantly on the number of PRs granted each year, down from a high of 79,000 new PRs in 2008 to about 30,000 each year for the past three years. We plan to maintain the current rate. This means that the PR population will remain stable, where it is, at between 0.5 and 0.6 million.

38. There are concerns that if we take in too many new immigrants, Singaporeans may increasingly feel like strangers in our own land. Thus, it is important for new citizens and PRs to fit into our society. Most new immigrants come from similar ethnic backgrounds as Singaporeans, but some may take time to adapt to our norms, culture and values. We will continue to encourage and help new citizens and their children to integrate into our society, adapt to our way of life, becoming more like us over time. I hope that more Singaporeans will also help foster stronger bonds in our community. This will help to strengthen our Singaporean core – not just in numbers, but more importantly, also in spirit.

39. With a careful balance of parenthood measures and controlled number of new citizens, our core population of Singaporean citizens will stabilise around 3.6 to 3.8 million in 2030, similar to the number if we had replaced ourselves fully. If we maintained our current birth rates and with no immigration, our Singaporean core population would eventually shrink sharply below today’s 3.3m. This was the first, and most important, part of the White Paper. To ensure that our Singaporean population is sustainable and stable.


40. After tackling the key issue of having a sustainable Singapore citizen core population, we then looked at what is required to take care of Singaporeans’ changing social and economic needs. Some have pointed out that the proportion of Singapore citizens in our total population will fall from just under 62% today to perhaps 55% by 2030, and asked: Is this Government pro-Singaporean or proforeigner? Why do we need foreigners working in Singapore? Why can’t we let Singaporeans take up all the jobs in Singapore?

41. Having foreigners here on work passes must be for the purpose of meeting Singaporeans’ needs and benefitting them, sometimes directly, sometimes indirectly.

42. Let us look at who these non-resident foreigners will be. The largest group, the majority, will continue to be those on work permits who do jobs and provide services that Singaporeans need, but do not want to do ourselves.

43. As Singaporeans become increasingly better educated and upgrade their skills, they will have higher job aspirations. Singaporeans in non-Professional, Managerial, Executive and Technical (PMET) jobs will also be higher skilled, but their numbers will fall by 200,000 by 2030. This is why we need more foreign work pass holders to take up more of the lower-skilled jobs, even as we upgrade industries and improve productivity. We will continue to take care of Singaporeans through upskilling programmes and Workfare, while imposing foreign worker levies and dependency ratios.

44. Let us be clear. These foreign workers are here to support Singaporeans’ needs. For example, we expect to need significantly more healthcare, eldercare and domestic services workers to support our ageing population and working families. A visit to any nursing home will show you that. They build our homes, rail lines and roads, and clean our housing estates. They thus enable Singaporeans to enjoy good social and municipal services while moderating the cost of these services, contribute to our quality of life, and allow more Singaporeans themselves to be in the workforce. But even so, the numbers of foreign workers will be controlled and their overall growth rate significantly reduced in the coming years. So, industries currently dependent on foreign workers will have to learn to do more with less.

45. While the number of Singaporeans in non-PMET jobs falls, the number of Singaporeans in PMET jobs is expected to rise by 400,000 to about 1.25 million by 2030, compared to 850,000 today. Two-thirds of Singaporeans in the workforce will hold PMET jobs in 2030, compared to about half today.

46. To sustain such a high ratio of PMET jobs among Singaporeans, we need a dynamic economy and businesses that produce goods and services not just for Singapore and the Singapore market, but for the region and the world.

47. Companies need foreign workers to complement the Singaporean core in our workforce, so that companies can pull together a diverse range of skills, backgrounds and experiences. These foreigners help companies to expand to regional and international markets, set up regional HQs in Singapore, or kick-start new high value-added sectors in Singapore. These new activities will provide more good job opportunities which Singaporeans can take up. But again, the work pass criteria will need to be more stringent. MOM has progressively tightened salary and qualification requirements for Employment Pass and S pass holders.

48. Those on work passes are here during their productive years, and return to their home countries after working here. Hence they help boost our ratio of working persons to retirees, but do not add to our retiree population.

49. With our aging population, our dependency ratio of working adults to seniors will fall to 2.1. By supplementing our Singaporean core workforce with foreign workers, we will be able to maintain a ratio of working persons to retirees of about 4 in 2030, similar to the OECD average today. This is based on our projections for significantly slower workforce growth, compared to our historic average. We are also able to adjust the numbers and types of foreign workers flexibly, depending on our changing needs.

50. We have heard concerns that there are jobs which Singaporeans want, but are instead going to foreigners. It is a fine balance. We need to allow companies to create the jobs, and to do so they may need a workforce supplemented by foreigners. But we must also ensure that Singaporeans will benefit from the good jobs. This is something we are looking into, and MOM will address Members’ concerns later in the Debate.


51. Are we pursuing growth at all costs and simply importing foreign workers to drive that?

52. Let us look at two possible scenarios.

53. First, the “freeze” scenario, where foreign workforce numbers are frozen at where they are today. I can see some Members of the House, looking nervously at this prospect.

54. What will happen? Our economy is likely to be dislocated. Both local and international business groups have said that the White Paper’s proposal to halve the workforce growth will create a very tight manpower situation. A “freeze” will hurt businesses, investments and jobs for Singaporeans. Smaller companies may fold. International companies may pull out because they cannot find the right staff. If there are closures or pull outs, Singaporeans in these companies may lose their jobs. If we had operated under the “freeze” scenario last year, in 2012, EDB would not have been able to bring in $16 billion of foreign investments, which will create 18,600 new skilled jobs. The opportunity to build up a critical mass in sunrise industries with good jobs of the future, may pass us by. Our diploma holders and graduates may not be able to find challenging PMET jobs to meet their aspirations.

55. A freeze would also mean fewer workers to do the jobs that many Singaporeans do not want to do, such as construction and cleaning, to help build HDB flats and rail lines. We will also need additional foreign domestic workers to help look after our elderly parents or young children, so that more Singaporeans can go out to work.

56. Now, let us consider the other alternative, the “business as usual” scenario. Some business or industry associations would prefer it if we allowed the foreign workforce to grow as quickly as before. If we allowed this, our total population will grow well beyond 6.9 million, and well beyond our physical capacity in 2030.

57. So, neither of these extreme scenarios leads to desirable outcomes. And we don’t want either of these. This is why we have sought to strike a careful balance in terms of workforce growth. We are not proposing to “freeze”, nor to continue with “business as usual”, and we are certainly not proposing to grow at all costs.

58. We are proposing a significant change of gears in our development trajectory. For the rest of this decade, we plan for total workforce growth to be 1% to 2% per year, half of the 3.3% per year over the past 30 years. Beyond 2020, workforce growth is expected to slow further to about 1% per year.

59. Sustaining high productivity growth will also become harder, as our economy matures and ages. If we are able to achieve our ambitious stretch target of 2-3% productivity growth per year in this decade, and maintain overall workforce growth at 1% to 2%, we can expect GDP growth to average 3% to 4% up to 2020, though in good years, we may exceed that.

60. From 2020 to 2030, with workforce growth further slowing to about 1% per year, and productivity growth moderating to 1% to 2% per year, we may see GDP growth of between 2% and 3% per year from 2020 to 2030, depending on both internal and external circumstances.

61. This range of 2 to 3% growth converges with the mature economies in the OECD. It is less than half of the 5.6% average annual growth that we saw in the 2000s, and the typically 7% growth that we saw in the two decades prior to that. 

62. So we are certainly not pursuing growth at all costs, as some have mistakenly claimed. Instead, we have set our sights on high-quality, productivity-driven, sustainable growth that will help to create good jobs, raise wages and improve the lives of Singaporeans.


63. Nonetheless, Singaporeans are understandably worried about how many people we can accommodate in our island home, given the current infrastructural constraints. Will Singapore be overcrowded?

64. To address the daily concerns of Singaporeans, we have stepped up development of public transport and housing. We have seen some initial results, and there will be further improvements in the next few years. Transport remains a particular concern.

65. The Ministry of Transport is implementing plans to add 800 new buses over 5 years, increasing capacity by 20%. We are opening one new section of MRT line every year for the next 5 years. The Downtown Line will begin to open from this year. We will continue to add more trains to reduce waiting time during the peak hours. And MOT is studying further steps to ease the strains that commuters feel today.

66. As we developed the Population White Paper, we worked closely with our planning and infrastructure agencies, to make sure that we could maintain a high quality living environment for Singaporeans.

67. Taking into consideration the various needs – to sustain our citizen population, and to meet the social and economic needs of our better educated workforce and an aging population – we arrived at a population planning range of 6.5 to 6.9 million. This is equivalent to a population growth rate of just over 1% per year from 2020 to 2030.

68. Madam, we are not asking Parliament to decide on reaching a population of 6.5 million, let alone 6.9 million. Rather, we have laid out the various needs and considerations, and are making provisions for the future. We need population projections to make infrastructure plans. Such a planning basis will allow infrastructure, which could take a decade to plan and build, and which would last several decades after that, to be properly located and sized. This is to give decision makers sufficient capacity and flexibility when they make decisions on policy settings in the future.

69. MND and MOT have laid out more fully the Land Use and infrastructure plans in Paper Misc. 1 of 2013 on “A High Quality Living Environment for all Singaporeans”. These have received wide coverage in the media.

70. Even if our population were to reach 6.9 million one day, our population density for developable land will be about 13,700 persons per square km, still much lower than the population density of 22,000 in Hong Kong and 26,000 in Seoul.

71. With good planning, the additional facilities and improvement works will enable Singapore to support a larger, older population while alleviating the strains that we are currently facing. To avoid falling behind in our infrastructure again, we will plan well in advance, implement these plans ahead of demand, and build in a buffer where possible.


72. This takes me to another key question: Why are we tabling this White Paper now?

73. Demographic changes have very far-reaching implications for our society, our economy and our living environment. We have reached an important turning point where our citizen population will begin aging rapidly and shrinking if we do nothing. This is why over the past year we have released several consultation papers providing information on population and workforce and encouraged discussion and comments.

74. Indeed, we have been asked by many why we even need to do this. It would be easier and less controversial to ignore our demographic challenge, and avoid dealing with it. But we believe in giving Singaporeans the full picture. It is more responsible to surface the issues and plan ahead while we are able to do so. Hence the White Paper, which charts out a roadmap that carefully balances the various needs and constraints, so that we can plan ahead to prepare for the future not just for this generation, but also subsequent generations, of Singaporeans.

75. If we do too little to address our demographic challenge, we risk becoming a shrinking ageing society, and our young people may leave to seek more exciting opportunities elsewhere. But if we take in too many immigrants and foreign workers, we may weaken our social fabric and national identity. We need to strike a fine balance.

76. And if we get this right, we will be able to achieve our goal to have a Sustainable Population for a Dynamic Singapore, with the well-being and benefit of Singaporeans at the centre of all that we do.


77. Madam Speaker, let me close with one last question: Who are we Singaporeans? Our forefathers came here from many lands, around the archipelago and further afield. Most Members would not have to go very far back in our own families to find somebody who came to Singapore from elsewhere and decided to sink roots here. They settled here, worked together for our future, and in the process evolved a set of shared values that allowed us to unite and achieve peace and progress together.

78. We are now moving into a new phase. The world is more globalised. We now have more Singaporeans living and working overseas, even as we have more foreigners living and working in Singapore. So, what does it mean to be Singaporean, and how do we retain our Singaporean identity?

79. We are Singaporean because of the common responsibility that we hold towards one another, because of the common hopes and dreams that we share with one another, because we are stakeholders and the protectors of the future of our country. These are what unite us and define us.

80. We feel proud to be Singaporeans because of what Singapore is and what Singapore stands for. No foreigner can share in this pride.

81. We feel sorrow when misfortune befalls one of our fellow Singaporeans, and display a generosity of spirit to our fellow Singaporeans.

82. We defend Singapore and Singaporeans, because we are the stakeholders of our country – and our families, our homes and our futures are here. No foreigner can feel the same way. We may help to ensure the safety of foreigners who are here in time of conflict, but we are not defending their families or their futures. We are defending ours. And that will never change.

83. We are Singaporean not just because of where we are born, but because of what we believe in, the values we live by, and a common desire to want to make our home, a better one.

84. The plans that we make are, and must always be, for the good of Singaporeans – today, tomorrow, and into the future. How to strengthen our cohesive society, with Singaporeans at the core. How to ensure that Singaporeans have good jobs in an increasingly competitive global economy. How to keep Singapore the best home for Singaporeans, even as other cities are becoming more attractive.

85. What will life be like in Singapore for Singaporeans by 2030? As a citizen in 2030, you will have good quality jobs and opportunities, have access to services to support your family needs, and enjoy a high quality living environment. As a student, you will have many opportunities to maximize your potential. As a working adult, you are likely to be holding a higher skilled job than today. Your home will be in one of the world’s most livable cities, with convenient access to recreational facilities, parks and green spaces, and good public transport. As a senior, you will have aged care and support facilities available in the community, and more beds in both acute and community hospitals, with sufficient staff to take care of you. Let’s strive together to realise the “Singapore promise” – a better life, a better tomorrow, for Singaporeans of all ages.


86. Madam Speaker, we have spent the past year taking in a diverse range of views, concerns and aspirations expressed by Singaporeans. All the views have been considered, though not all could be fully accommodated as some pull in opposite directions. We have tried to find a judicious balance in charting out our population roadmap for the future, with the well-being and benefit of Singaporeans at the core.

87. I hope Members of this House, and Singaporeans in general, will study the key considerations and support the recommendations of the White Paper as we work together to achieve our goal of A Sustainable Population for a Dynamic Singapore.

88. Madam Speaker, I would now like to call upon this House to endorse the White Paper on “A Sustainable Population for a Dynamic Singapore” as the roadmap for Singapore’s population polices to address our demographic challenge, and the Miscellaneous Paper on “A High Quality Living Environment for all Singaporeans” as the land use plan to support Singapore’s future population. I look forward to hearing the views of honourable Members during this Debate.

89. Madam Speaker, I beg to move. Question proposed.

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