We are not deciding now on the population trajectory beyond 2020. Nor are we deciding that we will have a population of 6.9 million in 2030. We are using this figure (which is at the high end of the 6.5 to 6.9 million range) only to prepare infrastructure plans. This is especially important for infrastructure plans that may take many years to implement, and once built will be there for decades. If we under-provide in our Land Use and infrastructure plans now, Singaporeans will have less flexibility in the future, and if things turn out unexpectedly, we will face bottlenecks and constraints. In fact, these are precisely the problems that we are facing today. We do not want to repeat these scenarios by under-providing.
What the population will actually be in 2030 will depend on the needs of Singaporeans, and the decisions we make on economic and workforce policy along the way. We hope that with restructuring and productivity gains, with Singaporeans living healthier and longer and therefore choosing to remain in the workforce longer, and more women joining the workforce, our population will not reach 6.9 million. It is the ability to meet the needs of Singaporeans and provide a good quality of life that is the driver. That is our objective, and not the numbers per se. If we are able to achieve this with a smaller population, whether 6.5m or lower, there is no reason to go higher. But it is prudent to plan our infrastructure for the upper end of the range, so that we do not get caught out.
Is our aging and shrinking citizen population really such an urgent issue? Between now and 2030, over 900,000 Baby Boomers – or more than a quarter of our present citizen population – will enter their silver years. By 2025, our citizen population will start to shrink if we do nothing. Let me explain what the trends mean. At a Total Fertility Rate of 1.2, for every 100 Singaporeans in this generation, there will be 60 Singaporeans in the next generation, and only 36 in the generation after that. And this poses a huge challenge to the sustainability of our Singaporean core population. As our Baby Boomers retire, and fewer school leavers enter the workforce, our citizen workforce will start shrinking by 2020.
Today, we have 5.9 working-age citizens for each citizen aged 65 and above. 5.9, so nearly 6. By 2030, this will fall to 2.1, or roughly one-third. This is about half the average of 4.1 for the OECD countries in 2010.
What does this mean for Singaporeans? Higher taxes on those working, to fund subsidised healthcare for a much larger number of seniors. Slower business activity and less investment in new sectors leading to fewer job and career opportunities. Young Singaporeans may decide to leave for more exciting opportunities in other growing cities. This would hollow out our population and workforce further. This is a real worry not just on a national level, but for parents too who wonder whether their children will go abroad in search of better opportunities, and they will be left here alone here during their silver years.
The best and most fundamental way is to encourage Singaporeans to start families. So, regardless of whatever else we do, encouraging marriage and parenthood, bringing up children must remain a key priority. This is not just for tackling our population challenge, but to continue to have strong families, and the fulfilment and happiness that come from having families. We introduced a Marriage & Parenthood Package in 2001. Last month, we announced the latest enhancements to the Package, taking on board the feedback that we received from Singaporeans over the past year. Since 2001, the families of about 350,000 Singaporean children have benefited from the Package. The latest enhancements will benefit more families.However, to support our families, we need the community, employers, extended families and individual Singaporeans to foster a pro-family culture in our whole society.
We would like to see the birth rate rise above 1.5, perhaps to the replacement rate of 2.1, but it will take time, and we will need all Singaporeans to do their part to make it happen. To prevent our Singaporean core from shrinking and ageing rapidly, we will need to augment our population with new citizens and permanent residents. A significant number of Singaporeans are themselves marrying non-Singaporeans, reflecting the more globalised nature of interactions between people today. About 40% of Singaporean marriages each year are between a Singaporean and a non- Singaporean, numbering some 9,000 in 2011. We should continue to welcome immigrants who can contribute to Singapore, share our values and integrate into our society. Taking in younger immigrants will supplement the smaller cohorts of younger Singaporeans born since the 1980s, and balance the ageing of our citizen population. If we are able to raise our birth rates, we can eventually take in fewer immigrants. But a baby born today will only be 20 years old in 20 years’ time.
Some have pointed out that the proportion of Singapore citizens in our total population will fall from just under 62% today to perhaps 55% by 2030, and asked: Is this Government pro-Singaporean or pro-foreigner?
Having foreigners here on work passes must be for the purpose of meeting Singaporeans’ needs and benefitting them, sometimes directly, sometimes indirectly. The largest group, the majority, will continue to be those on work permits who do jobs and provide services that Singaporeans need, but do not want to do ourselves. For example, we expect to need significantly more healthcare, eldercare and domestic services workers to support our ageing population and working families. With our aging population, our dependency ratio of working adults to seniors will fall to 2.1. By supplementing our Singaporean core workforce with foreign workers, we will be able to maintain a ratio of working persons to retirees of about 4 in 2030, similar to the OECD average today. This is based on our projections for significantly slower workforce growth, compared to our historic average. We are also able to adjust the numbers and types of foreign workers flexibly, depending on our changing needs.
As Singaporeans become increasingly better educated and upgrade their skills, they will have higher job aspirations. Singaporeans in non-Professional, Managerial, Executive and Technical (PMET) jobs will also be higher skilled, but their numbers will fall by 200,000 by 2030. This is why we need more foreign work pass holders to take up more of the lower-skilled jobs, even as we upgrade industries and improve productivity.
While the number of Singaporeans in non-PMET jobs falls, the number of Singaporeans in PMET jobs is expected to rise by 400,000 to about 1.25 million by 2030, compared to 850,000 today. Two-thirds of Singaporeans in the workforce will hold PMET jobs in 2030, compared to about half today. To sustain such a high ratio of PMET jobs among Singaporeans, we need a dynamic economy and businesses that produce goods and services not just for Singapore and the Singapore market, but for the region and the world.
Companies need foreign workers to complement the Singaporean core in our workforce, so that companies can pull together a diverse range of skills, backgrounds and experiences. These foreigners help companies to expand to regional and international markets, set up regional HQs in Singapore, or kick-start new high value-added sectors in Singapore. These new activities will provide more good job opportunities which Singaporeans can take up. But again, the work pass criteria will need to be more stringent. MOM has progressively tightened salary and qualification requirements for Employment Pass and S pass holders.
Those on work passes are here during their productive years, and return to their home countries after working here. Hence they help boost our ratio of working persons to retirees, but do not add to our retiree population.
We have heard concerns that there are jobs which Singaporeans want, but are instead going to foreigners. It is a fine balance. We need to allow companies to create the jobs, and to do so they may need a workforce supplemented by foreigners. But we must also ensure that Singaporeans will benefit from the good jobs. This is something we are looking into, and MOM will address Members’ concerns later in the Debate.
OPENING SPEECH BY DPM TEO CHEE HEAN AT THE PARLIAMENTARY DEBATE ON POPULATION WHITE PAPER, 4 FEBRUARY 2013 (click to read more)