More tax breaks, cash payouts, parental leave to boost Singapore's birth rate
SINGAPORE: More tax breaks, cash payouts and parental leave will be given to encourage Singaporeans to heed the stork.
They are among a broad range of measures to be delivered from 1 January 2009, in the hope of boosting the Republic's flagging birth rate - one of the lowest among developed countries.
Total fertility rate in the city-state was just 1.29 last year.
A high-level task force led by Deputy Prime Minister Wong Kan Seng took 18 months to craft the enhanced Marriage and Parenthood Package.
The government is allocating S$600 million, the bulk of the S$1.6-billion enhanced Package, to improve existing tax benefits.
They include the Qualifying Child Relief or Handicapped Child Relief, the Working Mother's Child Relief and the Parenthood Tax Rebate.
Said Finance Minister Tharman Shanmugaratnam: "We are effectively making a shift in our tax system towards further cut in taxes that favours those with families.
"And it's a significant cut because for most tax-paying families, the middle and upper-income group, if you have two kids or more, this amounts to 50 to 100 per cent reduction in the taxes you pay for the first 10 years of the child's life."
Parents can also spend more time with their kids as paid maternity leave will be extended from 12 to 16 weeks. Of which, the last eight weeks can be taken flexibly, over 12 months starting from the date of confinement.
Each parent will also be entitled to six days of paid childcare leave a year if their child is aged seven and below. The first three days will be employer-paid, with the remaining days paid for by the government.
For those with children under two-years-old, they can each take up to six days of unpaid infant care leave.
These changes will cost the government about S$300 million.
"Kids at a younger age tend to fall sick easily, so having the extra paid care leave actually allows me to spend time to be with them rather than take my annual leave,” said Tay Jin Li, a parent who approves of the enhanced Package.
However, Tay’s family is disappointed that paternity leave will not be introduced.
Said Wong Kan Seng, Singapore’s Deputy Prime Minister and Minister-In-Charge of Population Matters: "When we studied other countries with paternity leave, like the Scandinavian countries, we found the majority of them don't take it."
Still, it is hoped that fathers will play a greater role at home with or without paternity leave.
The ministerial panel said the issue of paternity leave could be revisited over time as the Package is being reviewed. The panel also said that it is important for Singaporeans to have the desire to upsize their family.
To help defray the cost of raising children, S$400 million will be set aside for the Baby Bonus scheme, a two-tier grant given to parents.
Improvements include increasing the cash gift from S$3000 to S$4000 for the first and second child, and extending the government's matching contribution of S$6,000 and S$18,000 for the Children Development Account to the first as well as the fifth and subsequent child.
Some S$220 million worth of Baby Bonus were given out in 2007.
Childcare and infant care subsidies will also almost double.
Working mothers can expect subsidies of S$300 or S$600 for full-day care, while non-working mothers will get S$150.
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what are your views on this?
Of course for parents, more leaves the better, more subsidies the merrier..
But at the same time, 4 mths maternity leaves, 6 days child-care leave... will companies start firing women??
