Tuesday, September 18, 2007
The Stingy Government
I was hoping to get full details of the Compulsory Annuity from yesterday's parliament but was very disappointed.
Nevertheless, I was shocked to hear what the minister has to say about half of Singaporeans will live up to 85 years old. According to the statistics provided, it seems to suggest that only 25% at most, will live up to 85 years old.
Well, even if this is so, how much would it cost the government to give each elderly who have lived past 85 years old $300 per month?
For the moment, we have less than 26,000, it would cost the government:
$300*26000*12= $96.6million a year.
(please note that this is worse case scenario which the figures include Permanent Residents as well).
Considering the fact that our government has a budget of $20billion a year, this is really a negligible sum. If or government has reserves of US$300billion that could earn 10% return, $96.6 million is really peanuts to start with.
According to the population statistics, the highest strata of the age group is 331.2K from age 40 to 44 years old. Even if half of them, as in the age group cohort, could survive up to 85 years old, how much would it cost the government each year to pay $300 to them every month?
This amount may be more in future, 45 years later, but this could be considered as "Present Value" of the cost of maintaining livelihood of those aged.
Is this a big sum? 1% of our $300billion reserves will give you $3billion!
Thus what puzzles me is why the PAP government wants to wash their hands off in taking care of the elderly? In the worse case scenario, it is not that a overwhelming sum. Imagine that the PAP government could splash two or three billions to Singaporeans just prior to general elections, I really doubt that this is a heavy burden at all.
We may have one of the super rich government in reserves per capital terms. But we also have a situation where our citizens are relatively "poor" as compared to other similar developed economies like Hong Kong. Despite of high saving rates, we still find our citizens unable to finance their retirement, why?
And the most absurd part of the situation is that even with a super rich government, it actually refused to take care of our society's aged! In conclusion, this is really a rich but stingy government indeed!
Goh Meng Seng