Thursday, January 20, 2011

Baby Incentive? What Baby Incentive?

Lim Swee Say refused to budge on minimum wage because he claims it's the easy solution to income disparity. Yet when it comes to falling birthrates, MM Lee Kuan Yew is opting for the easy way out by bringing in more foreigners.

Deputy Prime Minister Wong Kan Seng claims it's an uphill task to persuade Singaporeans to have more children, "The going is hard, but we have not given up. We will continue to support couples' decisions to get married and have children, and create a pro-family environment." So how sincere is the level of support?

Just look at the incentives the government Baby Bonus Scheme spells out on their website:
  • Cash gift of up to $4,000 each for your 1st and 2nd child and $6,000 each for your 3rd and 4th child;
  • Contribution in Children Development Account (CDA), a special savings account in which your savings is matched to the cap of $6,000 each for the 1st and 2nd child, $12,000 each for the 3rd and 4th child and $18,000 each for the 5th and subsequent child.
The CDA is good only until your child turns 6 years of age. From year 7, you're on your own. Don't bother with the mathematics - the university fees for a 4 year course alone will wipe out the most generous of the financial incentive packages.

Now, according to APM, France has Europe's second-highest birth rate in part because of incentives offered by the government. Way back in 2006, they were already offering:
  • 3-year paid parental leave with guaranteed job protection upon returning to the workforce;
  • Universal, full-time preschool starting at age 3;
  • Subsidized daycare before age 3;
  • Stipends for in-home nannies; and
  • Monthly childcare allowances (about $540) that increase with the number of children per family.
In addition to above, families were given the option of receiving $1,800 per month for one year while the mother takes time off work after having a 3rd child, or $1,000 per month for 3 years. Germany has the new "Elterngeld" — or "parent money" — program allows an adult who stops work after a child is born to continue to claim two-thirds of their net wage, up to a maximum $3,000 per month. Low earners can claim 100 percent compensation for lost wages. One parent can claim for up to 12 months; if both parents take a turn, they can claim the benefit for a total of 14 months — a tweak designed to encourage more fathers to help. The Swedes give either moms or dads 80 percent of their salary for a total of 480 days in a parental leave. Last year Singapore finished up with a $6 billion surplus, instead of the experts' projection of $3 billion deficit, yet Lee Kuan Yew is saying subsidies will break the bank. Go figure.

Singapore lawyer T. Chin explains why she has no intention of having children as yet, "It's a question of opportunity cost, and I can't afford the downtime from my career. Furthermore, speaking from my own experience as an only child, children are really expensive." It's worse when you have to count on the support of a complacent minister.


  1. LKY already say that if the cash benefits for more babies are too good, they can't afford it.

    But I would tend to believe that if incentives are too good, it may have the opposite results ie. the poorer families or the Malays will procreate at a even faster rate than desired.

    As someone has exposed that the govt is careful that the benefits in the form of tax benefits are really meant for the better off families to have more babies, are we really to blame for the failure in producing more babies?

  2. @Alan: "the poorer families or the Malays will procreate at a even faster rate than desired"- what are you implying? That only the Chinese and well-off should have babies?

    Most of us are well aware of the government's bias towards the Chinese and the well-off. It saddens me that level-headed citizens should share such outdated views.

  3. "We must encourage those who earn less than $200 per month and cannot afford to nurture and educate many children never to have more than two… We will regret the time lost if we do not now take the first tentative steps towards correcting a trend which can leave our society with a large number of the physically, intellectually and culturally anaemic.”
    - Lee Kuan Yew, 1967

    That is the reasons for the "matching" subsidies. You think the poor has those spare cash of 7years to match?

    An Australian paper once calculated that the cost of a baby is AUS $350,000 (+/-) per child, raising him/her to a full 21 years including up to college (public/state). This is not even adding any "enrichment courses". Since SG/AU are rather on par, you can do the math.

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