It was recently published that Singapore’s Total Fertility Rate (‘TFR’) dropped below 1.0 for the very first time. A psychological mark has been breached and this dominated Parliament debates and social commentaries. Given the clear TFR trend, factors such as 1) marriage plans disrupted by COVID-19 and 2) low births during the Zodiac of the Tiger continue to ring hollow. The declining TFR is a perennial problem that our government has tried to address as early as 2004 but to no avail. Plenty of money has been thrown at the problem but it has failed to stem the tide. Since this is a grave demographic problem, I think the time is opportune to try radical measures to increase Singapore’s total fertility rate. I am not a demographer nor a population scientist but this is what I have to offer as a father raising 2 young children in Singapore. The measures I am going to propose may sound like I am throwing in the kitchen sink but why not, especially since nothing much has worked so far.
1) Wait For BTO Should Be Less Than 18 Months
Currently, the average wait time for a BTO is 4 years. It is longer if the development is taller. This is way too long and every year waste waiting is a year less in a woman’s biological clock. From my own personal experience, I waited almost 5 years from application to my BTO key collection. As we wanted to ensure that we have a stable roof over our heads, we delayed our transition into parenthood. Thankfully, we were still able to conceive when we felt emotionally ready.
Diagram 1: Heartland Boy is grateful to have Olympia and Lenora
Therefore, I am proposing that the wait for BTO should be less than 18 months. Why 18 months? It is not uncommon for couples to plan for their wedding receptions a year in advance. Therefore, 18 months is probably a reasonable time for them to sequentially cross milestones such as wedding, home ownership and parenthood.
The government will point towards the Parenthood Provisional Housing Scheme or $300 rent vouchers as solutions to the long wait for a BTO flat. These measures are not very effective as nothing provides greater stability than home ownership. Parenthood is already a huge undertaking and having to move twice during this period adds unnecessary physical and emotional toll on young adults.
I understand that the government was scarred by the over-building of HDB flats during the Asian Financial Crisis. It’s time to throw caution to the wind and build ahead of demand. That is a risk but not as severe as one where there are not sufficient economically productive people in Singapore.
2) Mandatory for Every BTO project to have a childcare centre
Since we are on the topic of BTO, it is not rocket science that the vast majority of BTO buyers are prime candidates to be parents. With dual-income households being the most common composition these days, a childcare centre becomes a necessity for household with kids. If there is no childcare centre within convenient reach, it adds a layer of resistance to couples entertaining thoughts of parenthood.
I stay in a BTO project and I was shocked to learn that I could not enrol my first-born to the childcare centre downstairs as it was full. The waitlist was estimated to take more than 1 year to clear.
Similarly, I have several friends who stay in Bidadari and they often regaled me with their own horror stories of year-long wait on the waitlist of the childcare centres. As a result, they end up having to send their children to preschools that are located significantly further away. These are undue stress which can be avoided if proper masterplanning has been done in the first place.
Therefore, I hope that it becomes mandatory for every BTO project to have a childcare centre. At least we remove the lack of childcare centre out of the equation when couples are contemplating having kids.
Diagram 2: Make it mandatory for every BTO project to have a childcare centre
3) Free Education For Families With 2 or More Kids
Amongst my group of friends and colleagues who are parents, I notice that a majority of them chose to have just 1 kid. This is aligned with the latest study that most Singaporeans prefer to have just 1 child instead of being childless. This is a group that should be tapped and incentivised to help boost the TFR.
Borrowing a leaf from Japan, I think this can be offered in Singapore:
- Fees at Anchor and Partner operated childcare centres to be made free for families with 2 kids
- In addition to (1), families with 3 kids or more can also enjoy free education at public universities
School fees, especially university fees, are often one of the big-ticket items that parents are worried about. If this becomes free, families may feel that they are able to better cope financially with a bigger family.
4) Tiered Subsidy Scheme for Car COE
I have long advocated that it is not a necessity to have a car if you have young kids. For the past 6 years, I have relied on public transport, private hire cars or car rentals to bring my family out. Nevertheless, I recognise that some families find car ownership indispensable. With COE breaching six figures, it has become increasingly more expensive to own cars in Singapore. Rising COEs therefore put off these specific families.
To encourage more babies, the government may consider a tiered subsidy for families to offset the cost of COE:
- Family with 1 child – 10% off prevailing COE
- Family with 2 children – 40% off prevailing COE
- Family with 3 children or more – 80% off prevailing COE
The numbers are just illustrative but it has to be disproportionately biased towards larger families to promote higher TFR. After all, larger families have stronger justification in the need for a car from a convenience standpoint.
Where Would These Fiscal Funds Come From?
As with all freebies given out, some have to be removed to balance the books. I think Parenthood Tax Rebate and Qualifying Child Relief can be removed without significantly altering the TFR negatively. The additional taxes raised from their removal can help to fund some of the measures that I have proposed. Likewise, the rental vouchers and PPHS would be made redundant if BTO wait is less than 18 months.
Conclusion
My suggestions may sound controversial but the truth is that there is no one size fits all solution out there. Since this is a personal finance blog, I have only suggested measures that are or ancillary to the costs of raising kids in Singapore. There are other aspects such as lifestyle preferences, attitudes towards parenthood that I have not even mentioned in this article which potentially weigh more in the equation.
How can our society portray a lifestyle with kids as being cool/trendy vis-à-vis café hopping and globetrotting?
Other governments have already implemented even more radical measures. For instance, China clamped down on private tuition to reduce academic pressure on children. After watching CNA’s Regardless of Grades, can you imagine the furore if something similar is implemented here? It’s time for Singapore to up its game and start thinking out of the box to tackle this demographic and economic time bomb.
This article is published on 7 Apr 2024.
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This suggestions would make it worse for a family with 3 kids and 1 breadwinner, sends their kids to a half day kindergarten (as partner operated childcares are not suitable for kids attending half days), and who do not own a car, and now have to start paying income taxes. Are there any suggestions that would make it easier for middle income families with 1 breadwinner?
Hi,
You mind explaining why partner operated child care centres are not suitable for kids attending half days? My kid used to attend one for half-day sessions. The income tax saved is offset by the free university that I am suggesting
Staff of a few centres suggested that those attending half days should look for half day kindergartens as curriculum is spread out throughout a day. It was explained that attending half a day means the child would miss out on curriculum. The family with a single breadwinner may not be able to or would not be planning to pay for university and would need the extra help during the more expensive early years such as the Parenthood tax rebate.
Hi,
When I was looking for half-day kindergartens 5 years ago, they were really just a few of them within an expanded vicinity.
As with all economic policies, there will be trade-offs but I can understand your POV.
Hi Heartland Boy,
I love this post, the suggestions are very constructive and should be considered.
Hope you don’t mind if I cite your article in my newsletter https://thefamilyinvestor.substack.com on the declining TFR next week.
Thanks!
Hi Lara,
Thank you for your kind words. Yes, pls go ahead and share this article. That’s v lovely of you.
the COE thing is something i have discussed among peers.
i feel that every household (with kids) should be entitled to just one subsidied COE.
more kids more coe subsidy. etc, like your eg. but i think the subsidy can be more.
just like BTO. one household one hdb only. tag to your home address. not difficult to implement.
then someone will say, car congestion how? again, one home address one coe.
if you stay in landed or GCB address you want to own more than , you pay double COE for 2nd car, triple COE for 3rd car. its easy to understand how to calculate.
if they are indeed rich, triple COE wont bother them. whats addtional 100k more compared to the 1mil cart they are buying?
Hi FC,
I agree with you wholeheartedly. One household with multiple cars is an over-consumption. Their proportion are small but they should be made to pay disproportionately.