08 February 2013

Half-Hearted Baby Steps And The Procreation Dilemma

Will the fourth edition of the recently released Marriage and Parenthood Package raise the alarming low total fertility rate in Singapore?

New Housing Schemes
First-timer married couples with at least one citizen child below the age of 16 years will be given priority in the allocation of new HDB flats by having "a proportion" of flats set aside for them, and will be allowed to rent flats from HDB at "affordable rentals" while awaiting the completion of their flats.

It is difficult to see how these schemes address the low citizen fertility rate.

Many couples want to own their homes before having children. Waiting for their new HDB flats to be ready means delaying the arrival of their first child by up to five years.

Perhaps, the new housing schemes are being introduced to help new citizens get their new HDB flats faster.  Apart from overseas Singaporeans returning home (many of whom probably do not meet HDB's income ceiling), how many native citizens would not have their own homes if one of their children is as old as 16 years?  This suspicion is supported by Population White Paper 2013 — A Sustainable Population for a Dynamic Singapore, which envisages naturalising up to 25,000 foreigners a year.

This priority given to new citizens does not come without a cost because unless HDB ramps up the supply of new flats, there are fewer flats for the others, including couples waiting for a flat to start a family.

Assisted Conception
Couples may withdraw from their Medisave, up to $6,000, $5,000 and $4,000 for the first, second and third withdrawals, respectively, for assisted conception procedures.

Couples seeking assisted reproduction technology treatment in public hospitals will receive up to 75 per cent in co-funding from the State for treatment cycles, for a maximum of three fresh and three frozen cycles.  The amount of co-funding depends on the citizenship of the couple.

These couples are keen on producing children and do not need any persuasion.  They should be subsidised to the fullest extent possible and with as few conditions as possible.

It is illogical for the Medisave withdrawal limit to be lowered for each subsequent withdrawal.  Is the Government trying to discourage these couples from trying to conceive?

Only one spouse needs to be a citizen, although if both spouses are citizens, the State's subsidy is higher.  In cases in which only one spouse is a citizen, the couple is not required to undertake that, if the treatment is successful, the baby must be registered as a citizen.  Why?

Accouchement Fees
Accouchement fees in public hospitals will no longer be differentiated across birth order.

In the light of declining and low fertility rates, what took the Government so long to implement this?

Baby Bonus Cash Gift
This will be enhanced from $4,000 to $6,000 for the first and second children, and from $6,000 to $8,000 for the third and fourth children.  Higher birth order children are excluded.

Parents consider the Baby Bonus Cash Gift to be simply a bonus.  Few couples procreate, or will procreate, because of it unless it is a huge bonus such as the $500,000 suggested either in jest or in hope two years ago.  Therefore enhancing it incurs more cash outlay by the State without commensurate results.

Also, there are two rather peculiar conditions:
▪ It is limited to the first four children of the mother.
▪ The child's parents must be lawfully married.

Neither condition makes any sense in the context of a country that is bemoaning a fertility rate that is about half the replacement rate.

If a couple divorce after having received the Baby Bonus Cash Gift for their first four children, the woman will not receive the Baby Bonus Cash Gift for any children in her next marriage but the man may receive the Baby Bonus Cash Gift for any children in his next marriage provided his new wife has not already had four children.  Is this fair?

More importantly, why should parents be denied the Baby Bonus Cash Gift for higher birth order children?

Although society does not want to encourage, and should not be seen as encouraging, children to be born out of wedlock, these children are brought into this world because they were conceived accidentally and their mothers did not believe in aborting their foetuses.  Such children grow up to be citizens of Singapore.  If they are males, they will also be required to enlist for National Service.

Baby Bonus Child Development Account
Savings deposited by parents into a special savings account for their children are matched dollar-for-dollar by the State, up to a specified ceiling.  The funds may be used for approved child development needs at approved institutions.

The co-saving requirement means that if the parents can't afford to save, the child will not receive the dollar-for-dollar funding by the State.

Taking together (i) the cap is highest for the fifth and higher order children; and (ii) no Baby Bonus Cash Gift is given for the fifth and higher order children, the Government appears to be discouraging financially challenged couples from having more than four children.

The child's parents must be lawfully married.  See comments in preceding section.

Child Relief (Income Tax)
Parents can claim Qualifying Child Relief of $4,000 per child.  Working mothers can claim Working Mother’s Child Relief at 15 per cent of her earned income for her first child, 20 per cent for her second child and 25 per cent per child for all subsequent children, capped at 100 per cent of her earned income. The total child relief is capped at $50,000 per child.

The nature of child reliefs (and other tax reliefs) is that the higher a person's taxable income, the greater the financial benefit of the reliefs to the person.  This is grossly unfair and inequitable.  All parents should receive the same dollar tax rebate from the State especially since, according to the Government, the child reliefs are "in recognition of efforts by families in supporting their children".  One may even argue that the lower the income of a family, the more financial assistance it should receive to bring up their children.

A non-working mother who stays at home to nurture her children doesn't even qualify for Working Mother's Child Relief.

Maternity Leave
The mother must be lawfully married to the child's father.  This is an absurd condition to qualify for State-funded maternity leave (see discussion above).

Paternity Leave
Working fathers will receive one week of paternity leave, to be taken within 16 weeks after the child is born, which will be funded by the State (capped at $2,500 per week, inclusive of CPF contributions).

This is nothing more than a populist measure.

Conclusion
The Government is unnecessarily generous with some schemes even though they have little impact on procreation and strangely parsimonious with other schemes even though they have a direct impact on procreation.

The new or enhanced schemes in Marriage and Parenthood Package 2013 are unlikely to do much to raise the fertility rate.

Perhaps, the Government has all but given up on raising the fertility rate and decided to focus more on attracting more foreigners whether as naturalised citizens, permanent residents or transient foreign workers.

3 comments:

  1. Sorry to sound racist and elitist, but these rules basically discourage the Malays, less academically inclined and lower income workers from having kids. The latter for eg would pay little tax, so the tax benefits wldn't benefit them.

    As for your remark on the accouchment fees, yes, it is totally ridiculous that birth order is only Just being removed from the equation. Another instance of the lack of 20/20 foresight? Not being serious enough about having more children? An active discouragement of certain groups from having children even as the govt claims more kids are needed?

    One govt help scheme for couples insists that mums be sterilised after 2 kids. Coincidentally, many on this scheme are Malays.

    Generally, too many govt policies are poorly thought through and badly implemented. That we have made it so far fairly unscathed is pure good luck. It has very little to do with govt efforts. A lot of rules, like those supposed to help workers, are not followed. They look good though.

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  2. Nice Blog! Online Baby toys & game and Educational product supplier in singpaore Baby Gifts Delivery Singapore.

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  3. I strongly agreed as the goverment is not in the side of his citizens.i have 3 children from my previous marriage and the cash baby bonus is not imolent yet and I divorce all the custody is with my ex husband .I remarried to bachelor and have 2 kids so with 4th birth order but he is my 5th child as my previous marriage I have twins he is not entitle to cash bonuses why ?
    Why is the government so racist on malay giving birth I am half malay and half indian without us woman to giving birth our population is low , so if the government can be fair to give the same benefit to all singapore citizen babys instead of those PR .for your info they are from different biological father the government just cannot follow the mother birth order rate it is not fair to us woman .what happen if the woman is being rape ?the child is given for adoption u still follow their birth order?
    What happen to PR indonesian married to singaporean malays man do you the government know how chikdren they had in their country?
    Please be fair to your citizen do not woman your scapegoat and theman will enjoy the all benefit please .

    Regards
    nisah

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