New and expanded schemes to upgrade and redevelop public housing are in the works, as well as further healthcare subsidies, Prime Minister Lee Hsien Loong announced in his National Day Rally speech on Sunday (Aug 19).
Acknowledging that Singaporeans are feeling “cost of living pressures”, he noted that housing, healthcare and education are three major expenditure items – and thus three areas that the government is very focused on.
“We will spare no effort to ensure you can afford them,” he said.
As public flats age, the government will help homeowners keep them in good condition, he said.
The heavily-subsidised Home Improvement Programme (HIP), which upgrades older Housing Board (HDB) flats, will be extended to those built between 1987 and 1997, making about 230,000 more units eligible.
In addition, flats will be upgraded not just once, but twice during their lifespan. A new HIP II will be introduced, to upgrade flats when they are around 60 to 70 years old.
“HIP II will keep the flats safe and liveable, and also help them to retain their value as their leases run down. And it should see the flats through to the end of their leases,” said Mr Lee.
The first batch of flats will reach that age about a decade from now, so that is when HIP II will be launched.
Noting that the first HIP will cost the government more than S$4 billion (US$2.9 billion), Mr Lee said HIP II would probably cost even more, as the flats will be twice as old by then. “But it is well justified, and we will do it so long as MOF (the Ministry of Finance) has the money,” he said.
For flats coming to the end of their leases, a new Voluntary Early Redevelopment Scheme will let eligible estates vote for redevelopment earlier.
As some older towns were built within short periods, many leases will expire around the same time, meaning the HDB will have to “tear down and rebuild the old flats in a hurry,” noted Mr Lee.
“This is why it makes sense for the government to take back flats progressively over several decades, starting from about 70 years onward, and stage out the redevelopment.”
Similar to the Selective En bloc Redevelopment Scheme, residents will be compensated, though less generously.
The new scheme will not start for another 20 years as the government works out details such as how to choose the districts, the specific terms of the offer, and how to afford the scheme in the long term.
Mr Lee also addressed concerns about the 99-year leases on which public flats are sold.
Firstly, 99 years “is a very long time”. The HDB estimates that less than 2 per cent of households today, including those in resale flats, will outlive their leases.
For homeowners who do reach the end of their flat’s lease, the government will help them get another flat – though they will have to pay for the new lease.
Secondly, there is “one fundamental reason” for the 99-year HDB lease: “We need to be fair to future generations.”
Flats must be returned to the state so the land can be redeveloped and new flats built. If the government instead sold flats on a freehold basis, Singapore would eventually run out of land for new flats, splitting society into owners of inherited property and those without property, he said.
Finally, on a practical level, century-old flats would be worn down and obsolete, he added.
On the healthcare front, Mr Lee gave a recap of recent changes to improve affordability, further noting that the government has “taken special care of elderly Singaporeans”, with the Pioneer Generation Package (PGP) launched in 2014 for those born in 1949 or earlier.
He announced a new Merdeka Generation Package to help those born in the 1950s with medical costs.
Together with the pioneers, this generation contributed to building Singapore and started working when wages were still generally low. Now in their 60s, they are worried about having enough for their medical needs as they age, said Mr Lee. “I think we owe something to them.”
The benefits under the Merdeka Generation Package “will not be as large as for the pioneer generation, who had much less advantage in life”, but it will still help relieve their healthcare worries and show appreciation for their contributions.
The new package will cover similar areas as the PGP, such as outpatient subsidies, Medisave top-ups, subsidies for MediShield Life premiums, and payouts for long-term care. Details will be announced next year.
Another measure to tackle healthcare costs is the extension of the Community Health Assist Scheme, which subsidises GP visits.
Currently covering the low- and middle-income, CHAS will be extended to all Singaporeans with chronic conditions such as diabetes and hypertension, regardless of income.
Major areas of housing and healthcare aside, Mr Lee addressed the cost of living from other angles: lifestyle changes and price increases.
As standards of living rise, with once-luxury items such as cellphones becoming necessities, people must spend more to sustain a higher quality of life.
As for inflation, although wages have also been rising, they have not done so for everyone.
The government has tried to keep inflation low and prices stable, but cannot completely prevent price increases, said Mr Lee. In particular, he explained how electricity tariffs are linked to oil prices and cannot be fixed.
Throughout his speech, Mr Lee stressed how the government’s moves, new and old, were part of the its commitment to Singaporeans.
The housing and healthcare changes “are ambitious endeavours and will require large expenditures”, he said, with schemes stretching over 50 years and more – “several generations and many General Elections”.
Very few countries can make such long-term plans, but Singapore can, he added.
The next half-century is full of uncertainties, from new technologies to global tensions.
But for the best chance of success, concluded Mr Lee, Singapore needs a thriving economy and sound government finances to carry out its projects; political stability and outstanding leadership to plan for the future; and to work together as one united people.