During the National Day Rally on Sunday (20 Aug), Prime Minister Lee Hsien Loong of Singapore introduced the Majulah Package, a novel initiative designed to enhance retirement savings for Singaporeans aged 50 and above in the lower and middle-income brackets.
Under this plan, they will be eligible for an annual CPF bonus of up to S$1,000, provided they continue to remain in the workforce.
Individuals who have not yet met the Basic Retirement Sum (BRS) within the Central Provident Fund (CPF) will receive a one-time CPF Bonus of S$1,500.
Furthermore, those aged 50 and above will receive an additional one-time MediSave Bonus of S$1,000.
Targeted at those born in 1973 or earlier, the three-part Majulah Package will cost the Government about S$7 billion and it will benefit those with lower incomes and less wealth.
Approximately 1.4 million older Singaporeans, translating to over eight in every ten Singapore citizens aged 50 and above in 2023, are projected to gain from this package.
In addressing the cohort referred to as “young seniors,” encompassing individuals born between 1950 and 1959, as well as those born in 1949 or earlier, PM Lee observed that while this demographic generally experienced relative prosperity due to Singapore’s growth, their earnings lag behind those of the younger workforce.
This group also faces a shorter window to leverage the enhancements to the CPF system and amass sufficient retirement funds.
The Majulah Package, as outlined by PM Lee, seeks to alleviate concerns regarding retirement, particularly as this age group juggles the responsibilities of caregiving for both younger and older family members.
The package’s primary component, the Earn and Save Bonus, offers a yearly CPF bonus ranging between S$400 and S$1,000 to lower- and middle-income workers, contingent on their continued employment.
This bonus, in addition to the regular contributions from both the employer and employee, will be credited to the recipient’s CPF account.
Persisting uncertainty amidst escalating costs of living in Singapore
They remain uncertain whether the announced package will be sufficient to offset the far-reaching impact of the rising goods and services tax (GST) on all ordinary Singaporeans, particularly those from the low and middle-income groups.
Illustrating this, Suresh Kumar, a netizen, highlighted an imminent challenge: the impending 9% GST implementation in the following year.
Adding to this, there’s a prevailing worry regarding a potential surge in prices by vendors, an increase that could range from 5% to 10%.
Suresh Kumar’s tone turned pessimistic as he remarked, “Everything will be taken back.” This sentiment conveys the fear that gains made might be effectively countered.
The GST rate will increase from 7 to 9% in two stages – one percentage point each time on Jan 1, 2023 and Jan 1, 2024.
Another netizen argued how much government subsidies should be deemed sufficient. In response, Kumar countered whether the financial aid provided truly covers the escalating cost of living?
His emphasis was on being pragmatic and not blindly aligning with political stances.
He elaborated further with a tangible example, stating, “For instance, a cup of black coffee at the neighborhood café used to cost S$1.40. By December, it increased to S$1.50, and then by the following January, it was S$1.60. This was the situation around the same time last year.” Kumar forecasted that this pattern is likely to recur.
Netizens asked PM Lee to do away GST hike as a real solution to rising cost of living
In spite of PM Lee’s assurance, a netizen continues to harbor doubts about the effectiveness of these measures in assisting the intended group to manage the burdens and tensions of daily life, particularly given that the sums are deposited into their CPF accounts.
Truthfully, even with this provision, it is estimated to amount to less than $3 per day. This stands in contrast to the backdrop of heightened GST that affects every facet of expenditure.
Another Singaporean individual expressed gratitude for the Majulah package, yet also conveyed a preference for an alternative approach.
He indicated that it would be more favorable if the government could eliminate GST for essential goods, and reduce rents for hawker centers, Certificates of Entitlement (COEs), and electricity tariffs.
These measures, he believes, might have the potential to mitigate the escalation in costs for transportation, food, and utilities.
Tax the “wants” and don’t tax the “needs”
Another comment raised doubts about the prevailing taxation policies of the current PAP government.
The individual with the user name “Hui Tin” put forth a suggestion that, despite the subsidies unveiled by PM Lee, a more effective approach would involve exempting food and essential items from taxation.
This way, it would prove more beneficial than providing monetary assistance while simultaneously imposing taxes.
“Tax the “wants” and don’t tax the “needs,”,” the comment proposed a principle of taxing non-essential or luxury items while refraining from taxing necessities that are vital for daily living.
Conversely, another netizen presented a counterargument by pointing out that affluent individuals also purchase essential goods and food, which raises the question of how to approach this matter while ensuring wealth redistribution.
In response to this concern, Hui Tin highlighted that the current taxation approach involves taxing both the top 20% and the 80% comprising middle and low-income groups.
Netizens ridiculed the concept of “retirement” might as well be erased from the Singaporean vocabulary
In the context of the “Earn and Save” Bonus, PM Lee announced that ‘young seniors’ who continue to work would be eligible for an annual CPF bonus of up to S$1,000.
An astute netizen brought attention to a pertinent issue, stressing the importance of providing meaningful assistance to seniors.
The comment asserted that rather than consistently urging seniors to remain in the workforce without an endpoint, there should be a focus on genuinely aiding them.
This is particularly crucial for individuals facing medical conditions that hinder their ability to work.
The netizen underscored the significance of allowing seniors to savor their golden years and experience the joys of retirement. The call is for a delicate equilibrium between supporting seniors and ensuring their overall well-being.
Strategic support for employment
In a thoughtful comment, a perspective on a multifaceted approach emerges.
The comment raises an important concern about the potential impact of technological advancements, which could potentially lead to a sudden and steep decline in the availability of jobs across various sectors.
The netizen suggests a comprehensive strategy that encompasses not only aiding individuals in the immediate aftermath of job loss but also fostering an environment where businesses are supported to create new employment opportunities.