S'poreans need to learn how to stretch their savings: Lim Swee Say
By Pearl Forss, Channel NewsAsia | Posted: 24 June 2007 1938 hrs
SINGAPORE: Singaporeans will not be left in a situation where they have no jobs and are not able to withdraw their CPF savings, said Minister in the Prime Minister's Office Lim Swee Say at a community dialogue on Sunday.
For those who are now in their 50s, the proposal to allow withdrawal of their CPF minimum sum of S$100,000 at the age of 65 came as a hard hit, said grassroots leaders.
Currently, Singaporeans can withdraw the sum at age 62.
Michael Chwee, Tanjong Katong Neighbourhood Committee, said: "After the age of 55, are there anymore CPF contributions? If you want the worker to work longer, we must have extra savings. I feel the government is not really in touch with the ground when it makes policies."
Mr Lim, who is also the Secretary-General of NTUC, said: "Don't speculate and assume the worse – that the government is going to keep the CPF money for many years to come. That is not the scenario the government is working towards."
The scenario that the government is working towards is an economy where older workers can be re-employed in the same job, part-time or with a slightly different job scope.
But Singapore has a long way to go as the employment rate of those aged 60 to 64 is currently at 42 percent.
Mr Lim said: "25 years ago our life expectancy was less than 70 years old. Today, 25 years later, our life expectancy is about 80 years old. I'm very sure that 25 years from now, our life expectancy could be 85 or 90 years old. So we have to ask these very tough questions... will Singaporeans have enough savings and earnings to see him or her through this longer life span? If the answer is yes, then none of us need to worry, but I don't think the answer is yes.
"If you continue to have an income, you can defer drawing your CPF by another two to four years. This way, by the time you really stop working, there will be more money in your CPF. You can also earn interest in your CPF account."
Residents also expressed concerns about means testing for hospitalisation and whether or not the middle class will be squeezed out of C class and B2 wards.
Mr Lim said the Health Ministry is still working on the details for this but Singaporeans need to accept that the needy require more subsidies.
He said public healthcare costs are going up but government revenue may not increase at the same pace, hence there is a need for means testing to allocate limited resources more suitably.
Besides, he added, Singaporeans should be familiar with this concept as only families who earn less than S$8,000 a month qualify for public housing subsidy.
That is a form of means testing that is not disputed as much as healthcare.
A tightening labour market and how strict laws on employing foreign workers are affecting businesses were the other concerns that were raised.
One of the residents said: "I'm speaking on behalf of some small business retail shops and restaurant owners. They claim that they do not get work permit for foreign workers and due to this, they have to hire illegal workers."
Mr Lim said more foreign workers will be allowed in, but raising the employment of older workers, low-income workers and getting housewives to return to the workplace are top priorities. An overly liberal approach to work permits may impede efforts in these areas.
I don think its appropriate for someone who makes a few million a month to tell us to stretch our savings....
