Spending on seniors will go up in upcoming Budget: Indranee Rajah

Ms Indranee Rajah with two seniors at the AWWA Senior Community Home in Ang Mo Kio. ST PHOTO: TOH YONG CHUAN

SINGAPORE - Spending on services for the elderly will go up in the upcoming Budget, Senior Minister of State for Finance Indranee Rajah disclosed on Thursday (Jan 25), adding the Government does have to "look at the question of raising taxes".

Her remarks gave the strongest hint so far of that the Government Budget to be presented in Parliament on Feb 19 will focus on seniors.

Providing services for the rapidly ageing population will require resources, said Ms Indranee.

"Looking ahead, our healthcare needs will rise. Healthcare expenditure will obviously increase," she said. "That is something that we have to see how we can fund in a sustainable way. We do have to look at the question of raising taxes."

The focus on seniors reflects the changing demographic profile, she noted. "In the past we spent a lot on education. In the years ahead, healthcare is going to be an bigger part of our budget expenditure."

Ms Indranee, who is also Minister of State for Law, declined to give more details.

But she made it plain that the Government is not relying on increasing taxes alone to cover the increased healthcare expenditure and social spending.

"One of the most important things is the economy, you have to make sure that the economy grows," she said. "We are going to be paying a lot more attention to the economy, how can we expand Singapore's growth."

With her comments, Ms Indranee joined several government leaders who have dropped strong hints, from as far back as a year ago, of an impending tax hike to provide more resources for social spending.

Finance Minister Heng Swee Keat said in his Budget speech in February last year that healthcare and infrastructure spending will rise rapidly and there would come a time when there would be a need to introduce new taxes or implement higher tax rates.

Social spending such as education and healthcare almost tripled to $34 billion last year over a decade, while spending on infrastructure is expected to grow to $30 billion by the end of the decade.

Talk of a tax hike intensified in November last year after Prime Minister Lee Hsien Loong said at the People's Action Party Convention that "raising taxes is not a matter of whether, but a matter of when".

Addressing speculation of a tax increase about a week later, Ms Indranee told The Straits Times that the timing of the tax hike had not been decided. But she gave the assurance that the Government will give the public enough time to absorb the news and ensure that the poor and needy have enough help.

Speaking at the Singapore Perspectives conference on Monday this week, Mr Heng hinted that measures to support seniors will be one of the key priorities of the upcoming Budget. He disclosed that a group of leaders are pondering the challenges faced by the aged in Singapore.

There are about 500,000 people aged 65 and above in Singapore, and this is expected to almost double to around 900,000 by 2030.

Singaporeans will be given enough time to prepare for a tax hike, said Ms Indranee on Thursday. Individuals will have time to plan their finances, businesses will get time to study the impact on them and poor and vulnerable Singaporeans will get relief.

"Much depends on what the nature of the tax hike is, which is something that we have not announced yet," she said.

Her comments on the Budget were made during a visit to the AWWA Health and Senior Care - a cluster of facilities that provide services to seniors - in Ang Mo Kio.

During the visit, her first to the centre, Ms Indranee toured the centre and was briefed by the non-government organisation on its plans and programmes for seniors.

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