Oct 30, 2012

The National Cost of Growing Old .... Is Perhaps Not That Large


Greying population could 'cost Govt S$13b more by 2025'
by Teo Xuanwei 
SINGAPORE - By 2025, public services for what will be a greyer Singapore could cost the Government S$79 billion, or S$13 billion more than what it spends today, according to a new report released by global management consultancy Accenture. 
Even as the Government has highlighted the effects of the dramatic demographic shift in the coming years, including higher social spending, this is the first time an estimate of the cost has been worked out. 
According to Accenture's report, which covers 10 countries, the increased spending in public services - defence and public safety, education, housing and healthcare - will come up to the same percentage of gross domestic product (GDP) in 2025 as it stood last year at 12 per cent. 

The less-informed reader might feel scared. "Oh my goodness," he will say, "How can Singapore afford all these costs?"

There are many possible ways. For example, as senior citizens form an increasing proportion of the population, younger people form a decreasing proportion. In other words, there will be fewer young people for the government to look after. Increased expenditure on the old can be offset by decreased expenditure on the young. For example, if Singapore has fewer young people, government expenditure on education must logically decrease.

Also, fiscal spending isn't necessarily a bad thing (although the PAP will never be heard to tell you that). Government spending on areas such as geriatric healthcare must surely create jobs and stimulate economic growth to some extent. For example, there will be more jobs for nurses, doctors and other people who run and manage hospitals and old folks homes.

12 comments:

Winking Doll said...

> the increased spending in public services - defence and public safety, education, housing and healthcare - will come up to the same percentage of gross domestic product (GDP) in 2025 as it stood last year at 12 per cent.

If I interpreted the above correctly, the additional cost of S$13b is actually the same segment (%) of the GDP pie.

S$X = 12% GDP in 2011 is spent on public services.
S$X + S$13b = 12% of (larger) GDP in 2025

Therefore, in both 2011 and 2025, 12% of GDP is spent of public services. What kind of false alarm is Today trying to generate?

Amused said...

The 8% figure for population over 64 is temporary because of the existing demography. When Singapore reaches a stable, or saturated, population at some point, the proportion of over-64 population will likely be closer to 20%.

The country is currently saving at least S$13b a year on public services for the old. But this is not sustainable in the long term. To maintain the 8% figure would mean continually increasing ever larger population.

Better face the music and plan for it now. One cannot live young forever.

Anonymous said...

How much of these spending is real? Hospital are gaven a free rein to run it like a business without the business impacts of a private business

Anonymous said...

Hi Mr Wang,

the coded message that Today/PAP is trying to send out is that how are we going to fund the increased expenditure?

Raise taxes on the rich?
Raise GST?
Cut spending on other areas such as defense?

Anonymous said...

So should they limit the age of new immigrants so that the situation doesn't get worse? What about limiting the no. of senior defendants which new immigrants bring along with them ?

But the uppermost question left unanswered is why our govt seems to be worsening the situation when the current problems of overcrowding have not been seriously resolved? Are we still facing a waiting period of 3~6 months before we get to see the doctor or dentist at our public hospitals?

Anonymous said...

The national cost of growing old can be tied to some kind of COE scheme for those who wish to live beyond 70, 80 and 90...just leave it to The PAP scholars since PM Lee intends to stick around for at least another 10 yrs.

The said...

COE - yes, but can the old folks pay the premium? Better to scrap them when they are, say, above 65 years old. This will reduce the cost of growing old dramatically.

lumos said...

hi mr wang, actually i'm quite interested to hear what you have to say about the AEC that is coming up. there is a lot of news about it in Bangkok where i'm based now but i don't think i have even seen anything about it in the news in singapore.

with the AEC coming, singapore has way more to fear cos the influx of labour will be akin to that of the EU situation. and since u are in the financial sector, perhaps it will impact u as well? love to hear your thoughts

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Anonymous said...

Actually it is not really a problem as nature will take its course.

You see, if there are not enough young ones and the old even become majority, so what? As long as people can work till 65 or even 70, or whatever age PAP want, life goes on.

And when the old become majority in the case of Singapore, that's the time the population will start to decrease and problem of big, old population will also become less.

And finally, even if Singapore inhabitants become extinct, just like dinosaurs, so what? Let nature take its course.


AarCee EmJay said...

And more and more people will be working beyond 60.:(.
And since they dont spend much on fashion and other consumer stuff, i can imagine empty malls or cheap,like real cheap Prada stuff.
On a serious note, I think we would have a more democratic face of Singapore with unions and strikes being a part of our national life.Hopefully in a positive way.

Anonymous said...

@ November 5, 2012 8:34 AM

if you try searching for a job, do you think it is nature on your part for survival.

if you try to sit still and hope that the work or job will walk or move towards you, do you consider this to be your nature.

if policy makes make polices and citizens nudge for changes proactively, do you consider this to be nature (or human nature) that they are doing it.

nature will also include the human aspect of acting and it can never exist in isolation because nature requires the presence of human & their perception to know that it exists and to give it its meaning, in human terms of course.