THIRD CHILD MATERNITY LEAVE

6.05 pm

Dr Lily Neo (Kreta Ayer-Tanglin): Mr Deputy Speaker, Sir, I like to raise the issue of the third-child maternity leave although I am aware that this has been brought up for consideration many times before. I beg the indulgence of all the Ministers, especially the Minister for Labour, and the Members of this House to hear me out and consider the reasons I have for testing their patience with this issue one more time.

I believe that the reason for not granting third-child maternity leave hinges on the basic tenet of "have three, or more if you can afford it", and that affordability is reflected by the ability to circumvent lack of leave' with gain from tax relief' and by the ability to incur minimal or no economic burdens upon the employer and the nation. Sir, perhaps the time has come for us to reconsider these measures and consider other aspects of best home ideology. Let us also look at non-economic terms and allow our women folk a `less pace, more grace' life.

I am aware that our population policy and labour force status have to be carefully monitored and managed. However, I feel we are obliged to continually review the state of affairs and see if we can do a little better. Sir, please consider my five viewpoints concerning third-child maternity leave.

`Basic Right' Viewpoint

I have heard of instances where employees are not even allowed to apply for no-pay leave for their third-child delivery due to shortage of manpower. This is a totally deplorable state of affairs for the women. It saddens me that we are unable to grant a very basic right which every new mother deserves in fulfilling one of her natural roles. Confinement is really a necessity for the new mother to recuperate and it should be regarded as a right and not a privilege. I do not want to be unrealistic; let us consider granting this leave, at least to the third child birth for the time being. 'Population Policy' Viewpoint

The birth rate in Singapore has been stagnant for the past five years. It remains at about 50,000 per year despite tax incentives to encourage procreation through the revised population policy of 1987. Although the removal of the various disincentives may have helped, it does seem that the Third-child Special Tax Rebates (modified over the years of 1989, 1990, 1993 and 1997) are not sufficient to provide any significant effect on increasing the birth rate.

I think the reason for this lies in the fact that Singaporeans nowadays are more rational and are very much more responsible. Singapore has to maintain high standards in order to retain its success. And, in trying to achieve this, life can sometimes be pressurising. The concerns of the people are mostly about good and successful upbringing of their children. They are not about to have more kids just because of monetary benefits alone. Furthermore, with all that generous GST rebates and additional income tax rebates, I would say a larger number of our working women need to pay little or no tax. In other words, they get no added incentives at all. The responsible Singaporean mothers may just let our birth rate fall again unless we give them all the support we can afford.

'Higher Education and Higher Income Mothers' Viewpoint

Statistics have shown that the more educated mothers tended to have higher income. They also tended to have fewer children. I feel that the third-child maternity leave is more likely to benefit this group of mothers and should therefore be granted if we are targeting them to go for that third child.

For the past five years, the number of third child birth has been constant at between 8,000 and 9,000 each year. Noticeably, about 5,000 of these third order children every year were born to non-working mothers. My impression is that any change of policy will have no influence over this group and we will, in fact, favour the working and presumably higher income group when they contribute that third child. It is noteworthy that consistently over the last few years, slightly more than half of those who bore a third child had a secondary and/or higher level of education. And, it is significant that slightly more than four-fifths of those who worked, held jobs as service workers at the very least. I feel that third-child maternity leave will induce and encourage our economically active women to stay in their jobs after the second child birth and to go for that third child. This will give us that much needed increase in population for the future.

There is an argument that the higher income and better educated group of women is in a better position to bear and to bring up successful and stable children. There is also an argument that, whereas third-child maternity leave will favour everyone equally, enhanced tax relief will favour and give this group some added incentive. Fair points, and perhaps true too. But we do notice that even of late in Singapore, scholars and super-achievers often come from lower income families. Their parents may even have no formal education at all.

'Economic Loss' Viewpoint

The cost to industry, as a result of third-child maternity leave, should not be considered an unnecessary inconvenience in terms of manpower loss. And, it should not be considered exorbitant, at present wages, in monetary terms. For the first point, I contend that if the worker really wishes to have a third child and is not provided maternity leave, she may very well resign from her job anyway. Someone has crudely calculated the annual cost of granting two months of third-child maternity leave. The estimate of between $35 million and $45 million is possible. This is based on a statistical finding that 4,000 of the 9,000 third-child mothers are working and on the assumption that either all of them have a monthly salary of $5,000, or more than likely, 2,000 of them have a monthly salary of $5,000 and the other 2,000 have a monthly salary of $2,000. So, even if we err on the high side of the estimate, the cost to the industry in monetary terms is about $45 million. This figure is not large if we consider the long-term benefits derived from the increased population growth and from the satisfaction and dignity given to our working women.

'Economic Growth' Viewpoint

The Government has suggested that we allow more qualified foreigners to immigrate here. Having more talented people living and working for this country will enable us to gain and maintain global competitiveness. Recently, the Minister for Home Affairs also highlighted that we have a birth rate which is too low even to replace ourselves, let alone increase our population. He also said that " . since Singapore cannot produce enough people to come into the workforce each year, we need foreigners to sustain economic growth .".

Now, all this means that we do need more people. But, significantly, it was also suggested that we do need more people at all levels, including those in the low-skilled and semi-skilled categories. This being the case, I think it matters not any more who provides us with the increased numbers of people. But I would think that a Singaporean, with commitment towards his country, will be a better option than a newly arrived foreigner. And I would like to think that any of our women would be able to bear us children for these categories of workers.

Sir, having more talented foreigners immigrating here is not a bad thing at all. In fact, by mooting this idea, the Prime Minister has ingeniously fixed several of Singapore's potential predicaments. But the way I see it, although foreigners can contribute to the dynamism of our economy, they cannot quickly and easily duplicate the kind of ties which a locally born and bred Singaporean child brings with him into our society. These are the roots which build a nation. Without these roots, Singapore is nothing more than a temporary stopover, a little more like a hotel, a little less like a home. So, let us give all our working women more incentives to have more children. At the very least, let us give them that third child maternity leave.

In conclusion, Sir, encouraging "three or more if you can afford it" is the way to go. But I think it is time we gave a little more help for the journey. Let us at least offer third child maternity leave. In the longer term, our nation will benefit from getting the extra citizens. And especially so when we need to prevent the unfavourable projected dependency rate of 1 in 2.2 by the year 2030. Any improvement to this figure will be very welcome indeed. The resulting increase in population will add more young men to support and to defend the country besides adding more child-bearing and working women. Sir, please consider that not only do we gain this, we also gain one further step towards graciousness in our 'best home'.

The Minister for Labour (Dr Lee Boon Yang): Mr Deputy Speaker, Sir, let me respond to the hon. Member for Kreta Ayer-Tanglin's motion for adjournment. As she pointed out, under the Employment Act today, a female employee is entitled to eight weeks of paid maternity leave for only her first two children. In fact, section 76(4) of the Employment Act, as it stands today, prohibits employers from granting paid maternity benefit to female employees with more than two children. Although employees holding managerial, executive and confidential positions are not covered by the Employment Act, it is common for the employers to adopt a uniform practice with respect to maternity benefits for all their employees. Hence, in practice, all female employees in Singapore generally enjoy maternity leave for eight weeks for the first two children.

Let me, first, recount the background to this provision in the Employment Act. Prior to 1973, the Employment Act allowed for paid maternity leave for up to three children. In 1973, the law was amended to limit the benefit to two children. This was in support of the prevailing policy to encourage Singaporeans to have smaller families. With smaller families, parents with limited means would be in a better position to devote more time, resources and attention to their children.

When the new population policy was introduced in March 1987, the Government did consider whether paid maternity leave for the third child should be provided in the Employment Act. The policy was, "have three or more if you can afford it". Here, I note that Dr Lily Neo agrees with this approach to have three and more if you can afford it.

This new population policy was not a complete abandoning or rejection of the old population policy. Because we still emphasise that parents wanting to have a third child should have the resource to look after their children, meaning all their children. While it was imperative to get more women to marry and have more children, Government wanted to ensure that parents must be able to provide fully for their children. Children need more than just tender loving care from their parents. As the then First Deputy Prime Minister, Mr Goh Chok Tong, in announcing the new population policy, said:

`We must however be mindful that bringing up a child is a heavy responsibility. The child needs to be fed and clothed. He needs a supportive home environment, adequate care and parental attention. Every baby born must be well looked after by his parents. Otherwise, he or she would be put at a disadvantage against children from better homes.'

Sir, parents who are having difficulty coping with a family of two children should not be over burdened with more children. Doing so could well impair the opportunity for the whole family to raise their standards of living. Hence, in 1987, Government concluded that it was undesirable for the Employment Act to be amended to extend maternity benefits to the third child. Providing paid maternity leave for the third child in the Employment Act could send a wrong signal and encourage those who cannot afford to have more children to do so. This will undo the good of the new population policy.

Dr Neo asked whether by doing so we have denied women the basic right not to be able to claim maternity leave. I think what she meant is not to be able to claim paid maternity leave, because under the law, women are not entitled to claim for paid maternity leave, but they can always take unpaid maternity leave. And this is where Government, after looking at the issue, has come out with an alternative. Because we realise that for the new population policy to work, there must be incentives to overcome the restriction imposed by this particular section of the Employment Act. Otherwise, it will be extremely difficult to persuade women, working mothers in particular, to have more children. Hence, Government decided in 1987 that it would be more appropriate to give tax incentives to achieve the objectives of procreation. Since 1987, we have introduced a series of tax incentives to encourage women to have the third and fourth child. Currently, a women who gives birth to a third or fourth child can enjoy a special rebate of $20,000 which can be used to offset against her own or her and her husband's income tax liability. Where the woman is working, she can enjoy a further tax rebate equivalent to 15% of her income, which can be offsetted against her income tax liabilities. This amount is almost equivalent to the loss of two months' salary when she takes unpaid maternity leave for the third child. Both tax rebates can be set off against the parent's tax liability up to a maximum of nine years.

Dr Neo pointed out that with the adjustment to the income tax regime, as a result of the introduction of GST, very few working mothers will be able to benefit. This would be true initially. When the maximum set off period was only five years, it was true that not many working mothers could benefit fully from the special tax relief and the third child tax incentive. But since 1994, the maximum set off period had been increased to nine years to cater to the reduction of income tax following the introduction of GST. In other words, income loss arising from a working mother's two months' unpaid maternity leave for a third child would be more than adequately covered by the various tax concessions. Although she is taking no-pay leave during the period of confinement, her real loss of income over a period of years as a result of taking those eight weeks' no-pay leave would be offsetted by future tax reliefs.

Sir, the question today is whether the 1987 decision to lift that provision in the Employment Act, in fact, is still valid today. I think, on balance, it is still relevant to today's situation. In the light of globalisation and increasing economic competition, we must be cautious in adding to our labour cost. Whatever measures that can lead to increased cost to employers will have an impact on our competitiveness.

If we accept her suggestion, it would mean that the Government would be simply passing on the cost of promoting larger families to employers, by requiring them to provide paid maternity leave for the third child. Bear in mind that increasingly more and more better-educated women will be entering the workforce, and we are trying our best to persuade even more housewives to rejoin the workforce that, in fact, if we make this a requirement, then the burden on the employer will, in the years ahead, increase. I do not think this is a good solution. I think it is better that Government continues to bear the cost of providing paid maternity leave for the third child or even the fourth child by way of tax rebates to the working mother or to the family. This way, we can promote larger families for those who are best able to afford more children without adding to the cost of employers and affecting our competitiveness.

Sir, I should also point out that the decision not to extend paid maternity leave to the third child has not really discouraged women from remaining in the workforce. In fact, the labour force participation rate for women in the child bearing age from 25 to 44 has continued to increase over the years. Between 1970 and 1990, the participation rate for women aged 25 to 29 increased from 31% to 81%. For those from the 30 to 34 age group, the participation rate went up from 23% to 68%. Among women in the age group from 35 to 39, the increase was from 19% to 60%. And for those in the age group from 40 to 44, their participation rate rose from 18% to 57%. So you can see that over the years, the absence of a third child maternity benefit had not deterred women from rejoining the labour force.

In addition, let me point out that the number of third child live births had also increased significantly from 5,443 in 1986 under the old population policy regime to 8,293 in 1996, an increase of 52%. As Dr Neo pointed out, maybe in recent years, the increase had not been so dramatic. We would like to see more families who can better afford it to have three or more children. But we must also accept that there are other considerations and parents are in the best position to decide. What it shows is that there has been an increase in higher order births, particularly third child. Likewise, the number of fourth child live births had increased by 71% over the same period. This trend suggests that the Government's encouragement to Singaporeans to have more children if they can afford it is working.

Sir, in conclusion, I would like to point out that the policy to limit the paid maternity leave in the Employment Act for up to two children continues to be relevant and consistent with the policy to encourage procreation. By encouraging lower income families to keep their families small, they would be in a better position to provide opportunities and support for their children and to upgrade the standard of living for the whole family. We will continue to encourage working mothers who can afford it to have three or more children by way of tax incentives and tax rebates, so as not to add to the burden of employers. I believe this is a more focused and more effective means of achieving the objective of the new population policy.

Dr Lily Neo rose -

Mr Deputy Speaker: Are you aware that you have no right of reply?

Dr Lily Neo: May I have one clarification?

Mr Deputy Speaker: Strictly clarification. Okay. Keep it to the time.

Dr Lily Neo: Just one clarification. Can I ask the Minister this question? My point is that the promotion of larger families for the last five years has not made any impact with all these tax rebates.

Mr Deputy Speaker: That is a right of reply.

Dr Lily Neo: I just want to ask him whether he will consider other incentives now.

Dr Lee Boon Yang: Sir, as I have pointed out, in fact, there has been an increase in higher order births. We can debate whether the increase is sufficient or what else we can do to make more families have a third and fourth child. That is a separate debate. The point is that in many developed societies where there is economic progress, in fact, better educated and higher income families generally do have smaller families. We are trying to buck the trend. This is not only a peculiarity in Singapore. In many other countries where they have far better maternity benefits, you see exactly the same trend, or even a worse trend of having no children at all. I am not sure if we just go along the line that she suggests by providing more incentives, we will achieve the result that we want. If we look at the experience of many other developed countries, for instance, the Scandinavian countries, they have tremendous benefits. Are they having a lot of children? I am not sure that they are. Look at all the other developed countries. I do not think they have achieved the purpose. Let us be focused, let us be clearer about what we are trying to achieve. And by way of tax rebates, if we can achieve some changes, some shift in thinking of the parents, particularly the better educated and the higher income level, I think that is success enough for us.

Question put, and agreed to.

Resolved,

That Parliament do now adjourn.

Adjourned accordingly at Twenty-Seven Minutes to Seven o'clock pm to a date to be fixed.