10 February 2011

Government Policies and the Procreation Goal - Part 2

Many people agree that the state should give couples financial assistance in bringing up their children, but some miss the point that parents are primarily responsible for their children.

Discounted HDB flats, subsidised mortgage rates, free medical care, free transport etc.  What is next?  Children may soon wonder whether financial considerations motivated their parents to bring them into this world.

That said, the existing incentives should be refined, to give full effect to the underlying objectives.  There is no place for half-hearted measures.

Consider the Baby Bonus Scheme.

At the National Day Rally 2008, Prime Minister Lee Hsien Loong said, "It's a significant expense to bring up children . . .  [I]t's right for us to help women to lighten the burden of having children.  And that's why we had the baby bonus."

The bureaucrats, however, seem to have a different notion of generosity when implementing the Children Development Account ("CDA").

Parents have to co-pay to qualify for matching contributions by the state.  One likely inference is that those who can't afford to co-pay should not have children.  But these bureaucrats have forgotten that Singapore is desperate for more babies.  The government should be encouraging just about everyone to have babies, not just those who can afford to co-pay.

CDA funds may be used for prescribed purposes only.  It's bad enough when this applies to the state's contribution.  It's ludicrous when it applies to one's own contributions too.

Given the intention to lighten the burden of bringing up children, CDA should be an outright cash grant without requiring co-payment by parents.

Similarly, basing child tax relief on a parent's income is an outdated concept that irrationally skews the benefits toward the higher income earners when it is the lower income earners who truly need it more.  Instead, it should be a uniform, outright cash grant of a realistic amount.

Timely availability of new HDB flats is very important, as I mentioned in an earlier post.  Ensuring that new HDB flats are affordable, or more affordable as the case may be — for example, by reviewing how prices are set — is also important, not just for families with children but also for all citizen families.  The budget surplus may shrink a little, but our people will have lighter mortgage burdens, and they will have more money for themselves, especially when they retire, and for their children.  It is a socially correct balance.

Finally, many couples fear that their children may be mentally or physically handicapped.  Even middle-class families worry about how they can cope.  It is not a short-term problem that will go away, given time.  Unfortunately, there is no insurance they can buy to protect themselves, whether before or after their children are born.

The state should provide those with congenital conditions with comprehensive financial and non-financial assistance, including but not limited to Medifund support.  Means testing should be waived to the fullest extent possible.

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