PROBLEMS OF THE AGED (Paper Misc. 3 of 1984)

[Mr Speaker in the Chair]

The Minister for Health (Mr Howe Yoon Chong): Mr Speaker, Sir, I beg to move the Motion* standing in my name as it appears on the Order Paper.

*The Motion reads as follows:

That this House, having noted the Report of the Committee on the Problems of the Aged -- A Blue Paper by the Ministry of Health, February 1984, as contained in Paper Misc. 3 of 1984, approves the recommendations of the Committee on the Problems of the Aged.

The ageing of the population is a matter of serious concern to everyone. It concerns not only the aged but also society as a whole. It is for this reason that the Prime Minister in June 1982 appointed a Committee on the Problems of the Aged to study the wider issues and problems to be faced by Singapore as a result of a "greying population" and to recommend ways and means to meet the problems foreseen.

The magnitude of the problems to be faced by our children and our children's children can be best seen in population projections into the next fifty years. Please see page 10 of the Blue Paper. In 1980, the proportion of the very young (O to 14) and the elderly (65 and above) in our society accounted for 27% and 4.7% respectively of the total population. 68.2% of the total population were economically active, between the ages 15 and 64.

If present demographic patterns continue in the next fifty years, the proportion of the very young (O to 14) is expected to decline to 20% in 2030, the economically active age group (15 to 64) to 61% and the proportion of elderly (65 and above) is expected to quadruple to 19%.

Put another way, this means that while there were 15 working persons (15 to 64) to support one elderly person in 1980, the number of working persons to one elderly person will fall to only three in the year 2030. These demographic trends have far-reaching political, social and economic consequences.

The problems of loneliness, isolation of the elderly, of high medical treatment and hospitalization costs to keep them physically fit to remain functionally independent will escalate.

This can impose a tremendous strain on the resources of the country. And appropriate measures and policies must be designed now to cope with these problems.

Singapore has not been faced with the problem of a "greying population" before. We should study the experience of other countries. The Committee noted that a number of western countries deal with the problem of their aged by confining them to institutions. This is a totally inadequate solution.

Institutional care is unsatisfactory Homes for the Aged can be built but experience all over the world has shown that this is not the kind of place where the elderly should be kept.

The general trend in even long established welfare states is to move away from Homes for the Aged and only permit homes for the aged sick who need constant care and professional attention which family members cannot provide. Most of these states accept that it is best to let the elderly remain in the familiar surroundings of their homes and to be cared for by their families with help and assistance from community health assistance programmes and voluntary welfare programmes where necessary.

Singapore should learn from their experience. The Committee on the Problems of the Aged believes that confining an aged person to an institution should only be a last resort. It accepts that under certain circumstances, institutionalization cannot be dispensed with altogether.

It recommends therefore that admission to institutions should be confined only to aged persons who, for reasons of physical and mental infirmity, require the kind of constant care and attention that cannot be provided for at home.

A better measure will be to encourage and assist aged persons to live with members of their family and to continue in employment and work for as long as possible. Should they be retired, they must have work to do that can keep them active and occupied and in close touch with friends and relatives and with members of their community.

Instead of admitting the elderly to institutions in the misguided hope that the problem will end there, the Committee advocates that a national policy be adopted to encourage elderly individuals to be physically fit and mentally active to enable them to retain their normal living arrangements for as long as possible.

Society has often classified the elderly with the sick and the disabled. This is a myth that should be discarded. The attitude of society towards old age and the attitude of the elderly themselves towards their own physical and health conditions and their capabilities to continue to contribute to society and to work, to keep active and occupied should be changed. It would be a tremendous waste of resources to isolate the elderly from the mainstream of society.

The Committee is of the view that we must inculcate at the earliest age possible the need to plan for and maintain good health throughout life. People must also plan long before retirement to have adequate savings and assets that can enable them to have financial independence to continue leading an active normal life after retirement. They should maintain contacts with friends and relatives and have hobbies and recreational pursuits or participate in religious, cultural and social activities of the community to avoid loneliness and isolation.

For the elderly to have a sense of financial independence, they must continue to work not necessarily full-time or in the same job but to keep active and be occupied to have some source of income for as long as they are physically and mentally able to do so. Continued employment will not only enhance their financial position but help the elderly to remain physically and mentally fit much longer.

The Committee also recommended that the retirement age be raised. But since this is a complicated matter with different implications in different employment situations, it suggested that the arrangements be worked out through negotiations between employers and employees with Government setting the pace.

Older workers should also be provided with more employment options to suit their age and physical and economic conditions, for instance, in part-time work, in working at home or working on alternate days, and other arrangements, to encourage them to continue to contribute to the productive effort. Many may have lessened responsibilities and commitments and, for the sake of their physical health or to suit their own preferences, they may be willing to do a trade-off between less work and more leisure.

These suggestions point to the need for efforts to be made to keep elderly people occupied and active for as long as possible. Whether the retirement age should be raised or should be changed is not the crucial problem. We are all aware that many complications already exist with regard to the continued employment beyond agreed retirement age of workers who have been paid on the basis of their length of service rather than on increased effort and productivity. Our present system of remuneration entitles the worker to annually enhanced wages for no increase in effort or productivity.

The suggestion is that both the employers and the workers will need to change their attitudes towards employment. For the worker, the acceptance of a new job or a different kind of work, even if it means less remuneration, must not be looked upon as down grading or lowering of status if he has already retired. For the employer, a worker who has retired from the job and is now over 50 or 55 years of age must not be looked upon as old, useless and unemployable. The important point here is that the elderly must be kept active and occupied, They need not remain in their old jobs or even work for their former employers but they must not be deprived of the opportunities to work.

Facilities must be available for the counselling and retraining of older workers so that a worker can take on a new job that will enable him to be employed well into his sixties and beyond.

Individuals must be encouraged from young to save for old age. Instead of withdrawing the CPF balances in a lump sum at 55, the Committee suggests that there should be an option for retired persons to participate in arrangements which, after settling all outstanding payments, would provide an annuity to ensure a steady income throughout life. The Committee had all along been informed, however, that such an option would not be popular at this stage of Singapore's development. But since the problem of the ageing population would be threatening us in 20 to 30 years' time, perhaps by then such a measure would be more acceptable.

Mr Speaker, Sir, I now come to the most controversial recommendation. The recommendation "that the age at which CPF contributors be allowed to withdraw their savings should be deferred first to 60 and later to 65" has sparked off widespread criticisms and protests against the Report. The public's reactions and sentiments against this proposal were vehement. There was a general outcry. With one voice and in many tongues they made themselves heard loud and clear that they were definitely against what they regarded as an attempt to deprive them of the right to get their hands on their own money.

Everyone wanted to enjoy their life-time savings while they were still young enough to do so. Many feared that by the time they got to 60 or 65, they would be too old or too weak to spend their money.

Another point was that by raising the withdrawal date without raising the retirement date, workers would during the period between their retirement and their receipt of CPF balances be left without any income to maintain themselves.

Further, there was the ever-present risk of inflation and the decrease in the purchasing power of their money. Deferring CPF withdrawals would mean getting less value for their money and leaving a bigger estate for their children.

All these protests and arguments have a kind of skewed logic in that they ignore totally the very purpose of the CPF, which they must all know is to provide for old age and not for enjoyment.' The Committee made their recommendations with the best of intentions, looking not so much at the present but rather 20-40 years from now. It asked many questions before coming to this decision:

(a) Whether the generation of people now in their 40s had adequate savings to see them through what must be difficult days when they get to their 60s in about 20 years' time.

(b) Whether the CPF balances were, in fact, their only savings.

(c) Whether they realized that by that time (20 years hence) moral values and social attitudes could have changed, and that they might not be able to rely on their children or relatives for support and care should they need them.

(d) Whether they had any plans to safeguard their health and to maintain financial security for the remaining years of their life after 60.

The problems and difficulties facing future generations of elderly people are complex and complicated. They would have been overwhelming, if not for the undaunted human spirit in many of us. The Committee early realized that the elderly as a group were not homogeneous. Each person is, in fact, an individual in his or her own right. There were, even on the Committee itself, two members who were well into their 70s who not only needed no assistance or support whatsoever but could take care of all their problems, including their health problems that came with age, and could continue to serve the community and to contribute invaluable services to society. They also looked as if they could go on indefinitely or at least well into their 80s.

Hence, whatever recommendations the Committee made in its Report, they could not have referred to these two individuals and the many others in our society who are like them. The difficulty is that, in our type of political system, it is not easy for the Government to make the differentiation as between individuals and for the Committee to suggest different sets of recommendations to apply to different groups of people. The Committee's recommendations of necessity applied to the average citizen in general, with a bias for those less fortunate or less endowed who are required to struggle for a living and who can just maintain themselves over and above the normal problems and difficulties that daily confront them. The problems of the elderly, particularly those confronting our society 20-30 years from now, should be taken in their totality to appreciate the issues at stake, We should not focus special attention on a specific issue like the CPF balances, otherwise we may not see the wood for the trees.

Opponents to the deferment of the age of withdrawal of CPF balances must first show that CPF members on retirement at 55 years have sufficient savings for them to take care of themselves for another 15 years or more, Even if this is so, the deferment of the CPF withdrawal age is not proposed merely to provide for sufficient savings in old age. One of the reasons why the Committee has recommended the deferment of the CPF withdrawal age is to encourage every able-bodied person to keep on working for as long as possible. This is to enable a person to increase his financial independence and, equally important, to keep him mentally active and physically fit. It is not meant solely to see a worker through the remaining years of his life.

This issue also aroused much public indignation from those in their 40s and early 5Os. For those who were 50 and above, their protests were understandable - they could already have made plans to utilize their CPF balances. Hence, the Report did suggest special arrangements for graduated withdrawals which were, however, not deemed satisfactory by those who were affected. But for those in their 40s, the protests were on the ground that they could make better use of their money than just leaving it with the CPF to earn interest.

Sir, the Committee is realistic in accepting that in 20-30 years' time, the problems of the aged will have no simple or clear-cut solutions. It therefore directed its efforts to make it possible for the elderly to continue to live normal active lives, with dignity and self-respect for as long as possible. Whatever that can be done to help them in their effods to continue to be active, to have the opportunity to earn an income, or to give them support in case of need should be done. In the view of the Committee, all five sectors: (i) the society, (ii) the Government, (iii) the community, (iv) the family, relatives and friends, and (v) the elderly themselves, must play their part. The main thrust of the Committee's recommendations is directed at all these five sectors working jointly and in close cooperation and collaboration to make it possible for the elderly to live active normal lives for as long as possible.

The cooperation and active participation of these parties must go together to assist and support the elderly who will constitute a much larger section of our population in 20-30 years' time. Should thd elderly not be able to surmount their problems and difficulties, they would lose confidence in themselves and become withdrawn and isolated. The consequences would then be rapid deterioration of their physical and mental faculties with greater risks of infection, premature and rapid ageing and decline, plus diseases, complications and senile decay. These will add burdens to the family, the community, the Government and the society.

The Committee's recommendations, in fact, involve every sector of our society and require each sector to play its respective part in helping the elderly. Each sector had been given different assignments. The two specific assignments given to the elderly themselves were: (a) that they should keep themselves independent, physically fit, and active so as to lead a normal and busy life for as long as possible, and (b) that they must have financial independence and security.

Should the elderly be able to shoulder these functions satisfactorily without the need of CPF balances, then the problem does not arise. There will be many in our society who can do this and who are in this happy position. But if the CPF balances are the major, if not the only item of savings on which many must depend for their financial security in old age, then surely these CPF balances should be retained for as long as possible, rather than to be paid out at 55 to be spent quickly on luxuries, on travel or on some other form. of enjoyment. Improvements in medical science and in living standards in our society have made it possible for the average person at 55 or 60 to look forward to 15 or 20 more years of life. Their health might not have improved, even though there is no doubt that their expectancy of life has increased. The added need for medical treatment and hospitalization with advancing age is unavoidable.

In the areas of maintaining good health and providing care and support for the elderly, the Committee made a series of recommendations. The need for health and medical care in old age can be reduced with proper physical and health education which can teach individuals from young to adopt good health habits and proper life-styles. Such health education can contribute towards the prevention of the major diseases and ailments and perhaps enable the elderly to delay or postpone the ageing process.

Regular medical examinations can serve to detect diseases before they do untold damage or to reduce their severity. They help the elderly persons to monitor their own health closely and to reduce the need for care and suppon services in old age.

Community groups and charitable and religious bodies should attract more volunt.eer welfare workers to provide a wide range of welfare, medical and social services to supplement family efforts, or to give such assistance as to make it possible for families to accommodate and care for their weaker and less ambulant elderly members in their own homes.

Providing such services is a labour of love and will only have meaning and satisfaction to both giver and recipient when done with compassion, kindness and sensitivity.

The well-being of an aged person can best be maintained by the love and care shown to him by his family. Paid workers seldom provide such services satisfactorily. The Committee believes that Government is not the most effective or even the efficient provider of care and suppon services for the elderly. Volunteer and charitable bodies can do a much better job and lower cost.

The family system that held the Asian society together for so long is now subjected to strong and divisive Western influences. Every effort must be made through moral education and other means to enable this system to be maintained and strengthened. Through moral education, the inculcation of filial piety and the encouragement of general reverence for old age, Singapore may yet be able to counter the effects of westernization, urbanization, industrialization and other present day influences that will bring increasingly difficult problems to our ageing population. Legislation is recommended to be introduced to compel children to be responsible for the maintenance and care of their aged parents. Various tax concessions are also suggested to make life easier for the elder to keep on an active way of life.

In drafting this Report, the Committee consulted and received valuable advice from members of the public, from representatives of employers' associations, trade unions, religious and charitable organizations, the Council of Social Services and various Government Ministries and Statutory Boards. Many of these representatives were invited to serve either as members or as advisors to the Committee. The press assisted by running articles highlighting the increasing problems of an ageing population.

Public reactions to the Report have so far focused mainly, if not totally, on the recommendation concerning CPF withdrawal. Other recommendations that received attention include the raising of the retirement age, and to a lesser extent, legislation to require children to look after their parents.

Mr Speaker, Sir, the House may wish to address itself to the whole range of specific recommendations of the Committee and to the wider issues of the difficult problems of a "greying population" that will confront us and our children.

The views of the hon. Members of this House added to those already expressed by various organizations and individuals ever since the Blue Paper was published in February-March 1984 will help the Government to decide on the national policy to be adopted for the elderly.

Singaporeans must be prepared to face the wider issues now even though the problems may become acute in 20 to 30 years' time. They must anticipate these problems before it is too late. They will have to take decisions, some of which may be seemingly painful, to meet the difficulties ahead. Unless these difficult decisions are taken at this juncture, the Government and people of Singapore will have problems on their hands and the elderly, especially those less able to look after-themselves, may be in grave jeopardy. Already the overwhelming problems faced by countries with an ageing population are causing these countries grave concern and many of them are at a loss to find solutions.

Singapore has in the past 25 years taken many unpleasant decisions that are necessary in order to deal with difficult situations. We have some time before the problems of an ageing population are upon us. We must anticipate these problems and take preventive measures, some of which may affect individual plans.

Singapore's present prosperity has been built on a people prepared to take difficult decisions in the long-term interests of the society even when they require the acceptance of immediate sacrifices.

Sir, I beg to move.

Question proposed. 5.05 pm

Mr Lim Boon Heng (Kebun Baru): Mr Speaker, Sir, the Minister for Health is predictable. In typical fashion, he has decided that the best defence is offence and I must say that he has presented himself well and made a credible defence of this situation even though he knows that the vast majority of the people are against the recommendations of his Committee to raise the withdrawal age for ctsPF.

Sir, to my mind, there has been no other repod in recent years that has managed to provoke a seemingly apolitical people, aroused the entire nation, and evoked such an outpouring of dissent against its recommendations. The Committee headed by the Minister for Health has the signal distinction of laying to rest the myth that Singaporeans are disinterested in issues facing the State. I think the Minister himself has very graphically described the response to the recommendations of his Committee.

Yet the subject of the Committee's Report, the Problems of the Aged, is not a new one. Several persons have $poken up before, including the Minister for Social Affairs who devoted an entire lecture on the greying of Singapore when he addressed undergraduates at the National University of Singapore. Such public discourses on the subject were noted with interest, but did not touch any raw nerve.

Perhaps the Committee, after its careful study of the problems we will face in the years ahead, decided that the magnitude of the problem required some shock treatment to drive the message home. It has therefore searched for a good focusing agent, to get Singaporeans to look at the situation 20,30 or even 50 years from now.

It could not have chosen a more nerve-jarring focusing agent than its proposal to raise the withdrawal age of CPF from 55 years to 60 years and later to 65 years. Unfortunately, the proposal managed to focus the people's attention to the proposal itself, rather than the underlying problem.

What is it that the Committee is trying to draw attention to? The Minister has said that it is the implications of the ageing of the population. Two factors are causing a rapid transformation of the composition of our population by age groups. The first is the increase in life expectancy resulting from better medical care universally available to our citizens. Whereas in 1947, Singaporeans expected to live tiii 50, in 1980 they may expect to live till 70 for males and 73 for females. The second factor is the decline in the birth rate caused by the family planning policy and the tendency to have less children among the better educated, In economic terms, what these changes mean is that there will be a small proportion of the population working, to earn the income on which to support the needs of the whole population,

From the viewpoint of the State, the tax burden will fall on a smaller proportion of the people. If the level of social services that is provided by the State is to be maintained, then surely the tax rate will have to increase. I am not sure what the response of the taxpayers in the years ahead would be to such a tax increase. But social services will increase also as the proportion of older people increases. For example, as the Minister has amply stated, the cost of looking after the elderly will increase. It has been estimated that the cost of looking after the elderly is three times that for the young. The higher cost of providing services to meet the needs of the elderly is borne out by statistics on Government spending. As an example, in the United Kingdom, in 1980, while the proportion of the elderly, defined as those above 65 years, was 14.1%, the proportion of Government spending devoted to the elderly was just above 20%. The highest actually is in Sweden where the proportion of the elderly aged 65 and above amounted to just over 15% but the proportion of Government expenditure on the elderly is in the region of 30%.

In terms of the family, assuming that family ties remain strong, smaller families mean that the responsibility of caring for aged parents falls on fewer children who will then have to fork out proportionately more. The generation of Singaporeans now in their 5Os and 60s on average had five to six. children. If each child supports the parents by giving $100 per month, the parents can live decently on $500-$600 a month. For the generation now in their thirties, the norm is two children. When they retire 20 years from now, if they receive the equivalent of today's $100 from each child, they will have to live on plain rice and pickles.

As the Minister has said, the problem is indeed a major one. If we wish to grow old gracefully and live decently, then measures should be taken now to prevent a deterioration of our standard of living.

I am in agreement with the Committee on its analysis and projection of the demographic profile 20-30 years' hence and the consequent impact on our society. The problem is that the Committee was not able to put its message across well to the public. Nevertheless, it should be commended for outlining the problem concisely and clearly.

Twenty-five years ago, the challenge to Government was the capability to build schools to serve the young. Now the population change will test the ability of Government to be equally mindful of the old.

The Committee draws attention to the fact that CPF balances are not enough to last the account holder the rest of his life, and seeks to remedy the situation to augment his income. The Committee quite rightly points out that it is a waste of talent to retire workers at the age of 55 years. I wholeheartedly support its statement that "the elderly must be recognised as possessing experience, skill, knowledge, talent and wisdom". They could not have chosen better words. I also agree with its observation that they are now more likely to be medically fit because of better medical care.

The Committee made a direct call to the National Trades Union Congress to encourage its constituent trade unions to raise the retirement age first to 60 and then to 65 when they re-negotiate their collective agreements. I do not think the NTUC or its affiliates require any prompting. They have for years been pushing this issue with, regrettably, limited success. It is the employers who need prompting. I regret to note that there was no recommendation in the Report calling on the employers' organizations to urge their members to agree to raise the retirement age.

At the same time, the Committee was against legislation to raise the retirement age. The Report states that "past labour force surveys have shown that the partici- pation rates those in the 55-59 age group have been steadily rising even in the absence of legislation." I do not know how accurate earlier surveys are because I know that 25 years ago, most people work until they were medically unable to continue. Such were the conditions then that they had to work until they literally dropped dead. The labour force participation, to my mind, would have been rated high if they had lived to 55-59 years of age or above. If we want to see whether there has been any improvement in the labour force participation rate for this age group, then we should look at the statistics of recent years. They are more likely to be comparable. If we are going to detect any trends, then I think we should look at them from the statistics available from 1979 to 1982. The Labour Force Surveys from 1979 to 1982 show that, for the 50-54 age group, the participation rate has remained steady at just above 57%. There is no increase. The participation rate for the 55-59 age group has varied from 47% down to 44%, and up again to 48%, indicating that most likely it is a steady rate with no improvement because of errors of compilation. The participation rate for those above 60 actually declined from 18% down to 16%. So I cannot agree with the observation by the Committee that the labour force participation rate of the elderly workers has increased.

I know from experience that the majority of employers will not listen to requests to raise the retirement rate, let alone negotiate. This reluctance seems to be a universal affliction. The Committee has looked at other countries. So let us look at Japan. They are facing a rapidly ageing population, and they have studied the problems for many years. They have also thought that raising the retirement age is a solution to enable older people to be financially independent. So from 1976, the Japanese Minister for Labour was empowered to require enterprises to employ a certain proportion, 6%, of workers aged 55 or over. Progress was slow. So to make it more attractive, in 1979 the Japanese Government made half the salary paid to elderly workers in the 55-59 age group tax deductible for the enterprise. It was only then that the retirement age rose slowly. And now, from July 1984 the Japanese Government will introduce a subsidy plan for promoting re-employment of workers. Under this plan, an enterprise will be provided with 300,000 yen to 400,000 yen, depending on the size of the company, for each worker employed aged 60 to 64, who has retired from another company as he reached the latter company's mandatory retirement age, and provided that the reemployment is accomplished within three months of retirement. Re-employment must be made through contact between the two firms. This is to promote intercompany contact to facilitate re-employment. This example shows that if it is not desirable to use the stick, then the carrot will get results, slowly.

Elsewhere, in the United States, they are not talking of retiring at 60 or 65 years. The mandatory retirement age was 65 until the Retirement Act of 1978 raised it to 70. As soon as this was mooted, discussions began by employers on how to circumvent it. One option was to stiffen productivity requirements, leading to more firings. The company might find the option of terminating the employee more attractive. Another option, more likely to be used, would be to improve the economic incentives of early retirement - the so-called "golden handshake", with which Singaporeans are familiar, to induce voluntary labour force withdrawal. We may expect similar responses here in Singapore if the retirement age is legislated. So legislation to raise the retirement age may not work. What incentives can the Government offer to make it attractive for employers to employ the elderly workers?

Now, we also know that there are those who are working in physically demanding jobs where working beyond 55 years may not be practical. The worker himself may not want to continue and the employer may not want to employ him. There are also other jobs where good eyesight or dexterity of hands is important. With age, the level of productivity may actually decline. For such specific category of workers, re-employment in another job may be the only way to keep them employed.

It is a well-known fact that the decrease in labour force participation of men has been relatively greater for the lesser edu- cated than for those who have higher qualifications. Since unemployed older men tend to have less education than younger workers, they are at a disadvantage when they have to seek other jobs.

The Report of the Committee makes no mention of the fact that the older workers in Singapore have much lower qualifications compared to current fresh job entrants. Our older workers are poorly qualified not because of lack of talent or intelligence, but because of lack of opportunity when they were young.

So retraining is likely to be required before redeployment or re-employment. Who will pay for such retraining? What schemes, apart from the BEST programme, will be pertinent to these workers? I foresee a continuing need for retraining, even for our younger workers who are better qualified. The pace of change of technology is such that knowledge becomes obsolete in a matter of years.

The retraining needs of the present elderly workers will differ from those of the younger and better educated workers. Unless there is a practical and accepted solution as to how the cost is to be financed, employers will remain unwilling to employ older workers, except for the minority whom they consider value for money because their productivity has not declined but improved with experience.

Any company-sponsored re-training is eligible for the Skills Development Fund grants. Perhaps it is appropriate that the SDF categorises the retraining of older workers under a new scheme and give it special attention.

The Committee recommended that wages be determined by productivity, and calls again on the NTUC to counsel workers to help them overcome the psychological barriers that prevent them from taking up jobs at a lower pay.

As the Minister has quite rightly pointed out,for as long as we have known it, we have followed a seniority-wage system. It is based on the principle that with experience, the worker is more productive and there is a ceiling on how much wage he can get. But to get the worker to admit that past 55 he is over the hill and should suffer a pay-cut raises all kinds of ego problems, His self-respect is involved. How does he face his own family when up to the age of 55, he is considered a good productive worker, but past his 55th birthday he is not as good as before when to the human eye there is no change in his physical appearance? Perhaps for a small category of workers who will become less productive in their jobs, there may be a more humane way. Maintain his take-home pay, but reduce the contribution to CPF. From 55 years to 59 years, the employer's contribution to CPF can be reduced by, say, 5% a year each year. The worker retains his self-respect. He gives to his family the same take-home pay, maintains his disposable income, while the wage cost to the employer is progressively reduced by up to 25%.

If need be, additionally, there is the 2% payroll tax and the 4% SDF contribution. This could be exempted for workers aged 60. Beyond 60, adjustments could be made to the employee's contribution to CPF to achieve a reduction in wage cost. This scheme need not penalize the workers who are even more productive beyond 55 years. While the employer's contribution to CPF may be reduced, his wages could be adjusted to ensure that he is paid his market value, depending on his productivity and on market forces. The Committee is against the reduction or exemption of statutory levies. I think this stand has to be reconsidered.

Now, let me turn to the controversial proposal to raise the withdrawal age of CPF. First, I think it is unreasonable to raise the withdrawal age of CPF before there is general acceptance of raising the retirement age. How is the worker expected to live from 55 to 60 if he is without a job? The Minister has earlier said that he has got other savings. But to which group of workers in Singapore is he referring to? To the lower income group or the upper income group? I am not sure that the lower income group will have that much savings, We can only consider the step of raising the withdrawal age of CPF, even if it is desirable, when we are sure that the worker will continue in his job till the age of 60.

Secondly, Singaporeans expect to withdraw their CPF balances at 55 years, and have made their plans accordingly. Some wish to invest in business or place it in banks where they may get better returns, or utilize part of it to fulfil religious obligations, such as a pilgrimage to Mecca, or even reward themselves for the long years of labour by a holiday trip once in his life-time.

The Committee contends that "the lump sum of CPF money gives them an illusion of financial security". It makes the assumption that the people as a whole are unwise, more likely to squander the money and, therefore, ought to be protected against their own weaknesses. I hold the opposite view. The vast majority of Singaporeans are hard-headed and realistic. They also happen individually to think that they themselves know best how to invest their money for maximum returns.

It is this wish to maximize returns on their CPF savings that makes it so difficult for them to accept the possibility of later withdrawal. If they think that keeping their CPF balances with CPF is better than depositing with a bank or invest in stocks and shares, they would willingly leave their money with CPF. For example, raise the interest rate to 20% and see how many would withdraw their savings from CPF? I think the CPF Board would have a hard time asking them to withdraw. But what is it that the Committee was trying to achieve in suggesting deferring the withdrawal of CPF funds? It is not to keep the worker's CPF savings but to help him manage his savings. This is as far as I understood from the Minister's explanation. The question then is, to what extent should the Government protect the citizens against their own mismanagement? Should not the Government intervene as little as possible and allow the individual the satisfaction of managing his own money?

The contributor to CPF has worked and planned on the basis of receiving a lump sum at 55. He does not need the entire sum at 55. Perhaps we can allow him to withdraw part of the CPF savings at 55 years, say, 25%. This would meet the requirements of most workers - to meet their living expenses, even to go overseas on pilgrimage or on holiday. At the same time, let us take measures to encourage employment till the age of 60 years.

At 60 years, let us allow a worker to withdraw the balance, except for a certain sum. This sum has to be calculated. It should be enough to allow him and his spouse to live on bare necessities. They should not starve. Perhaps the sum would be enough to pay for rice and pickles or bread and water. And whatever he has above this sum, let him withdraw all of it and invest it. If he is able to manage it well, he can live a more comfortable life. In this way, it is likely that only a small number of CPF contributors will have balances below this fixed sum at 60 and will be unable to withdraw their CPF savings. I think this proposal is fairer to the worker and we do not burden the State with more responsibility than is necessary with the affairs of the individual citizen.

Even if we succeed to raise the retirement age to 60 or beyond, and Singaporeans are conscious of the need to conserve their savings to see them through retirement, can we be sure that the elderly will be financially independent? There will still be those who do not have enough savings at 60. Who will take care of them?

For centuries, Asian societies have regarded the caring of the aged as the responsibility of the children. If there is one virtue that traditional parents took care to instil in their children, it was a sense of gratitude and respect towards their elders. Today, family ties are still strong. This is borne out by a survey on values carried out in 1979 by the Leisure Development Centre of Japan. There were 13 countries in this survey, including Singapore. Respondents were asked to state "yes" or "no" to the statement that "parents have no right to make their children look after them in old age". Only 8.3% of Singaporeans replied affirmatively. This was the lowest among the 13 countries. Affirmative answers for the rest were about 20% or above. It was 49% for the United Kingdom and 66% for France. So Singaporeans came out favourably in this survey. I am not sure we can say that Singaporeans are more filial than their counterparts in other countries, but at least the right attitude prevails.

But we cannot be sure that this attitude will remain strong. A number of factors suggest a likely weakening of this attitude. We are, as the Minister said, subject to Western influences. Rapid urbanization, resettlement and easy availability of HDB flats have broken down the extended family system into nuclear families. That is the consequence of one of our policies. All these factors will slowly erode our traditional concept of family relationships and responsibilities.

I agree fully with the Committee that we must strengthen family ties and inculcate filial piety through education. At the same time, our traditional concept of family ties should be enshrined in legislation. I agree that we should make the children's responsibility of providing for the elderly enforceable by law. This measure is repulsive to some. They think it is an indictment on the people, that it implies an unfilial nation. I do not think so. We have legislation making crime punishable. Such legislation does not imply that we are a nation of criminals. In fact, the legislation is a statement of our principles and sense of justice. So likewise, legislation to make clear the children's responsibility towards parents actually indicates that respect and care for elders is considered a value worthy of enshrining by law. As such, I agree with the Committee's proposal on legislation.

Sir, the Committee's Report touched on other social issues. I am sure my colleagues have a lot to say, and I will leave it to them.

I do not agree with all the recommendations of the Committee and I have made some of my own proposals. My colleagues and I have discussed the Report, and we all feel that the Motion in the name of the Minister requesting this House to approve the recommendations of the Committee cannot stand without amendment. I think the Motion should be amended so that Government can take into account the views expressed in this House. When framing the amendment, I could have phrased a specific amendment touching on the controversial proposal to defer the withdrawal age of CPF. But I know that my colleagues in this House have other points to express and really it should be the consensus view of this House that should be considered by the Government. On this, the Minister himself has conceded.

So I have phrased a general statement that would allow all the views of Members of this House to be taken into account. Therefore, I would urge my colleagues to support the Motion which I propose to make.

Sir, I now beg to move that the Motion standing in the name of the Minister be amended, to leave out,

'approves the recommendations of the Committee on the Problems of the Aged'

appearing in lines 3 and 4 and insert -

'recommends to the Government to adopt the Report, after making appropriate amendments to the recommendations taking into consideration the views expressed by this House'.

Sir, I beg to move.

Mr Speaker: It has been proposed, as an amendment, to leave out the words -

'approves the recommendations of the Committee on the Problems of the Aged'

appearing in the third and fourth lines and there to insert -

'recommends to the Government to adopt the Report, after making appropriate amendments to the recommendations taking into consideration the views expressed by this House'.

Question proposed.

Mr Speaker: I believe there is also going to be another amendment. So I think it may be convenient if the debate on the Motion and on the amendment by the Member for Kebun Baru, and also an amendment later on by the Member for Anson, be proceeded with under the provisions of the proviso to Standing Order 40, paragraph (1). The said proviso to the Standing Order inter alia provides that,

'. . . with the assent of the majority of Members present, debate on the motion and on any amendment (including an amendment to an amendment) proposed thereto may be proceeded with or continued simultaneously . . . as though the debate were a debate on a single question . . . .'.

Is it the wish of hon. Members that debate on the Motion moved by the Minister for Health and the amendments thereto, of the Member for Kebun Baru and the Member for Anson, be proceeded with in accordance with the provisions of the proviso to Standing Order 40(1)?

Hon. Members indicated assent.

Mr Speaker: Therefore, the debate will accordingly range over the Motion and the amendments thereto. 5.40 pm

Dr Toh Chin Chye: Mr Speaker, Sir, I believe, as a senior citizen, I am qualified to say a few words on the CPF.

The Member for Kebun Baru has given an exposition from the viewpoint of the NTUC, and I do not wish to cover the ground that he has already made. There is no doubt that we should be aware that there will be a problem of the aged in the years to come, whether in the year 1990 or the year 2000. But it is important, therefore, that we should try to divorce a proposition that has been put forward by the Minister for Health, trying to explain to us what the size of this problem will be and the means to solve this problem. Unfortunately, the Report of this Committee on the Problems of the Aged has tried to solve this complex problem by touching on the Central Provident Fund as if that were the only solution, very much the way that the Minister for Health went about trying to solve the problems of the sick by using Medisave and taking off 6% from the CPF to collect monies which is spent by patients in the hospitals.

The reason for all this uneasiness on the problems of the aged is related to the CPF. The problems of the aged have been forgotten because you are touching people's savings. I related in the debate on Medisave how the Government could cover the cost of the entire operations of the Ministry of Health from revenue earned by the Ministry of Health plus the 2% payroll tax, without touching on savings. You have created a precedent. You have touched savings for Medisave. I abstained from the vote. Others have agreed. So the Minister for Health says, "Well, I have got one nut. Now I can get two nuts. How do I solve the problems of the aged? There was no great opposition to touching the CPF. Now I shall solve the problems of the aged by dipping into the CPF."

But here, he came across a hornets' nest. It is because, Mr Speaker, the problem is that those who attempt to seek a solution to the problems of the aged are civil servants who draw pensions to which they do not pay anything. They get a gratuity, two-thirds, and pension, one-third. So it is quite easy then to handle other people's problems by touching their savings. Pensions do not come from savings. Supposing, if we did convert the entire cost of running the civil service on taxes and savings, I believe you would have a different report today.

There are many countries that are facing this problem. It is not unique in Singapore. No political problem is new for Singapore. And this is a problem that has been encountered by bigger societies and bigger economies than ours. They have employed devious ways of how to allow those who are ageing to retire gracefully and in security without becoming a pauper. Why, in America, there is even a scheme in the private sector which permits a retiree to donate his entire savings to a company and he is posted to a village where he can retire until he dies. That is a very expensive village. It is not meant for those with small CPF savings.

This problem of touching the CPF should be related to the use of the CPF, the management of the CPF and the contribution of CPF. I have repeated, time and again, that the CPF, having risen now to 50% of wages, is becoming a vexatious burden, not only to the employee but also to the employer. The employer is now paying 25% of salary towards the CPF, plus 2% payroll tax, plus 4% Skills Development Fund. That makes 31% cost on payroll alone. Of course, if there is an increase in salary from NWC recommendations, all these taxes go up. The burden on the employee is that his take-home pay becomes less, and since his take-home pay becomes less it is an issue for union bargaining, (house-unions now) to bargain with the employer for more pay.

The Minister for Finance is extremely concerned with the amount of money being locked into CPF, reducing the liquidity in commercial banks. I think that is a very genuine concern which, as the Minister for Finance, he ought to be very worried out. He should not allow his Minister for Health to dip into the CPF or to increase the CPF, because this is a social problem that is popping up. It must be thought out in breadth. We must have a vision which encompasses breadth. Do not have tunnel vision. I would like to know that we have got telescopic vision. But, Mr Speaker, I have never had the problem of tunnel vision, and that is, looking at a problem along just one line without bothering, or researching in depth, the impact on other areas.

Let us look at the problem in general. Over the last five years, 1979 to 1983, an average of 8.4% only has been withdrawn from the balance due to members who contribute to the CPF. Only 8.4%, that is if they retire at 55. I would like to put this question to the Minister for Health or the Minister for Labour who is responsible for administering the CPF. What would this percentage be if the withdrawal age were raised to 60 or 65? Of this amount that was withdrawn, two-thirds were spent on buying houses, mainly HDB flats. So only one-third was spent on retirement. In 1983, $1,718 million were withdrawn but only $374 million were spent on retirement.

So the problem we should ask ourselves is this. As the deposit in the CPF grows and grows, our balances in the CPF will grow, and when we withdraw that sum of money, will we suddenly have overnight millionaires as retirees? How many of them are there? Will it generate inflation? I do not think it will be, because if two-thirds of the balance are withdrawn for purchasing houses and only one-third for retirement, therefore it is less of a concern that raising the age to 60 or 65 will mean that we will be controlling consumption by the private sector. What is irksome is this: that the Government is using people's savings and telling them how to spend their savings. That is the nub of the problem.

I think everybody recognizes there is a problem for the aged. The Minister for Health says so. Only they do not believe in his methods of solving this problem. There are homes for the aged. I have a kongsi for the aged. One of my members who was a worker in the PSA had withdrawn his CPF, but it was so small that even if he were to spend $100 a month, it would have vanished in three years. It was that small. This was the reason why he is living in my kongsi for the aged.

We need to clearly define the boundaries within which the CPF will be used for retirement. We must spell that out. You just cannot say, "Let us raise the withdrawal age to 60 or 65." It must be 60. It must be 65. Now, at which age? This Paper does not contain any calculation at all to say what will happen if it is withdrawn at 60, or what will happen if it is withdrawn at 65. If I were a person who has no relatives, if I were a widower with no children, all the assumptions made by this Committee - that you will be looked after by your children - then I do not qualify under any of these grounds. The statistics show very clearly that 43% of your senior citizens preferred to live with son and daughter-in-law and only 12% with daughter and son-in-law. But we are at the same time pursuing a family planning campaign. So if you have two daughters, you had it. Your chances are reduced to 12%. So do you understand now why the Chinese persist in having a son?

Mr Speaker, I think fundamental principles are being breached. The fundamental principle is this. The CPF is really a fixed deposit or a loan to Government, which can be redeemed at a fixed date when the contributor is 55 years old. If I were to put this sum of money in a commercial bank and, on the due date I go to the bank to withdraw the money, the manager says, "i am sorry, Dr Toh, you will have to come next year", there will be a run on the bank! It is as simple as this, that the CPF has lost its credibility, the management of it. This is fundamental. You were taken by surprise by Medisave. Then they say, "6% of your Special Account will be kept for Medisave and you cannot withdraw that, even if you were to die."

Now I ask the Minister for Health, and I asked him last time, whether his word is binding on future Ministers. Neither will the Minister for Labour's word be binding on future Ministers for Labour. Can any Government or any Minister guarantee that in future years a law will not be passed that will say, "All Special Accounts in the CPF cannot be withdrawn until you die"? Your Special Account now is up to 10%; 6% Medisave, 4% for what? So unless you use the CPF to buy property, your money is in real danger of being kept under lock and key by others, not under your own lock and key. This is the nub of the problem - the credibility of the management, gradual encroachment into the purpose of the CPF which was instituted really to provide for retirement.

Again, there are many permutations on how people retire. Assuming that the CPF is like a vast insurance company, and then it hands out an annuity. I am old. It may well be that at 60 or 65 I am no longer employable. I may be senile, nobody may want to employ me. So the argument of the Member for Kebun Baru is weak there. It does not mean that employers, by just raising the retirement age to 60 or 65, will find that there will be increased productivity. The man may be a menace to the company! There are many of them in Woodbridge Hospital. I am not really convinced on that score.

You have, again, other types of contributors to the CPF. You have got expatriate workers, you have got Malaysian workers. Nowhere in this Paper is it spelt out what will be the fate of the balances of expatriate and Malaysian guest workers. Will Malaysian workers, who are now eligible to withdraw at 50 and 55 years old, be affected if, assuming today, we agree that the withdrawal age will be raised to 60 or 65? I think your mind must be applied to see the problem as a whole, and how this problem affects others. The aged guest workers are not going to stay here. So let them take their money when they go home. If that is permissible for expatriate workers, why should it not be permissible for your own workers? That is where I see the contradiction in the management of the CPF.

I am not against the Minister for Health spelling out future problems, but I would like to ask him, "Is it true, really, looking at these statistics, the dependency ratio is so many percent?" Does that mean that the Government is really supporting all these aged? On the one hand you say, "No, no, it is the family members who are supporting the aged parents." So where does the CPF come into play? This is why this document - it should be a green paper, not a blue paper - would have been better if minds had been applied to the whole problem, so that we are set at ease about your thinking. Or are you trying another fast one?

Mr Speaker, as a senior citizen, I am beyond the decision of the Committee whether my withdrawal age should be 60 or 65.

Mr Howe Yoon Chong: You have already withdrawn yours?

Dr Toh Chin Chye: I have withdrawn mine. But in fairness to my constituents and to others who have not yet reached this age, I ask "Do you wish me to speak, or do you wish me to be dumb?" They say, they are against this. So I have to explain to them the problems that they will be facing and, most importantly, some of them tell me this. They are not going to squander their money on world-wide trips to see Mickey Mouse in Disneyland. Some married late. By the time they retire at 55, their children are due to go to junior college or the university. Many of them are banking on this sum of money to cover the cost of their children's higher education.

Some hon. Members: Hear! hear!

Dr Toh Chin Chye: If you say they cannot withdraw until 60 or 65, their children had it. It is as simple as that. With these words, Mr Speaker, I pass the debate to abler Members of the House. [Applause]

Resolved,

"That the debate be now adjourned." - [Mr E. W. Barker].

Mr Speaker: Debate to be resumed what day, Mr Howe?

Mr Howe Yoon Chong: Monday, 2nd July, 1984, Sir.

Mr Speaker: So be it.