SDP calls for scrapping of CPF Minimum Sum

By Charissa Yong, The Sunday Times, 8 Feb 2015

The Singapore Democratic Party (SDP) yesterday issued calls to scrap the Minimum Sum requirement of the Central Provident Fund (CPF) and to establish a national minimum wage of $7 an hour.

In an economic plan titled "A New Economic Vision", the SDP also proposed retrenchment benefits of up to 18 months, to the tune of up to $2 billion a year.

The 105-page paper, presented by SDP secretary-general Chee Soon Juan at Bras Basah Complex, gave eight broad recommendations to reduce income inequality and poverty, and boost innovation and productivity.

Dr Chee said that there is a clear plan on how these proposals can be funded, repeating the party's longstanding call to increase taxes on the rich to support the poorer segments of society.

In particular, it wants to hike income tax for the top 1 per cent of earners from the current rate of 20 per cent to 28 per cent, over five years. It also seeks to reintroduce taxes collected on wealth left behind after an individual's death, for those with assets worth more than $20 million.

SDP chairman Jeffrey George, vice-chairman John Tan, treasurer Chong Wai Fung and assistant treasurer Jaslyn Go also spoke on Singapore's economic challenges at the two-hour-long event. It was attended by 60 people, most of whom were party supporters.

On the subject of the CPF scheme, the SDP wants the CPF account to be used purely to save for retirement, instead of also paying for medical bills and property.

To this end, it advocates returning CPF savings in full to Singaporeans when they turn 55. Retirees can choose to have their CPF savings returned to them in instalments, added Dr Chee.

The concern that retirees may squander their savings is a "red herring", said Dr Chee. Instead, the problem at hand would be those who do not have enough CPF savings to retire on; these people could be helped by other social measures, he said.

Last Wednesday, a Government-appointed CPF advisory panel released recommendations to make the scheme more flexible, but said that the requirement for a basic amount to be kept locked up should remain.

The SDP's economic plan is the latest in its series of activities ahead of the next general election, which must be held by January 2017.

Last month, the party kicked off its election campaign by announcing its slogan - "Your Voice in Parliament" - and strategy, and since then has conducted walkabouts in the northern and western parts of Singapore.

Yesterday, Dr Chee told reporters that the SDP is looking to raise at least $200,000 to fund its election campaign, or about $20,000 per candidate.

"We're nowhere close to that (sum) yet, but I'm very encouraged by the response so far," he said.