SINGAPORE - The $6.1 billion Merdeka Generation Package for those born in the 1950s is neither linked to the election cycle nor the unexpected surpluses during this term of government, said Finance Minister Heng Swee Keat on Thursday (Feb 28).
Speaking on the third day of the Budget debate, Mr Heng said the Merdeka Generation Package, which was announced in Budget 2019, is "a plan that has been carefully studied over a significant period of time".
He noted that such a responsible and long-term approach to planning will mean younger Singaporeans need not fear that they will end up with a disproportionate share of the cost.
"But if we lose this discipline and make rash promises, like universal benefits regardless of circumstances, I would worry for our future generations."
His remarks come in the wake of comments, including that of Workers' Party chief Pritam Singh on Tuesday, that some see the cohort-based package as timed to coincide with the election.
Mr Singh's comments had earlier prompted Senior Minister of State for Trade and Industry Chee Hong Tat to rebut that it is misleading to link packages to election cycles as such schemes cannot be rolled out at the start of the Government's five-year term, since surpluses need to be accumulated and put aside to fund healthcare and other benefits.
In his speech rounding up the debate, Mr Heng also addressed doubts about whether Singapore should continue to have similar one-off packages, such as the $9 billion Pioneer Generation Package launched in 2014.
Mr Heng explained that a cohort-based approach is fair due to the differing needs across generations, and builds on permanent healthcare programmes.
"Not many countries in the world had gone through a similarly compressed period of accelerated growth, leading to relatively wide divergences between the older and younger generations," he said. "Building on our substantial base of permanent healthcare schemes, a calibrated cohort-based approach is fair to different generations."
He said that such policies are custom-made for different cohorts' needs.
For example, the Pioneer Generation Package for those born on or before Dec 31, 1949, aged 65 and above in 2014 and who obtained citizenship on or before Dec 31, 1986, was targeted at pioneers who did not benefit fully from today's social safety nets.
"They had fewer or no educational opportunities. They earned less. The Central Provident Fund contribution rates started out very much lower," he said, noting the same applies to those in the Merdeka Generation.
Younger cohorts' needs are different, as they have higher education levels and are helped by schemes including MediShield Life, which helps pay for large hospital bills and selected costly outpatient treatments, as well as CareShield Life, a long-term care insurance plan.
These will put them in a better position to look after their own healthcare needs when they reach retirement age, said Mr Heng.
"The Government will look at the needs of each group, and tailor our policies and programmes in the future," he said.