The Finance Minister Tharman Shanmugaratnam said that healthcare financing will be a key fiscal challenge for Singapore as he finished his Budget debate in the Parliament this Wednesday. The government’s projected healthcare expenditure is expected to triple to almost S$12 billion a year by 2020. That’s a major increase from S$ 4 billion in 2011. The healthcare spending, Tharman said, is expected to reach to S$8 billion in 2015. This is a year than had been expected.
Tharman said that the government needs to make significant shifts as the population of SIngapore ages. To make things clearer he informed that the Pioneer Generation package is for 450,000 Singaporeans. Whereas in contrast to that, there are more than a million Singaporeans with their ages between 45 to 64, waiting for their retirement. He said that the challenge lies in the fact that the people need quality healthcare in an affordable way. He said that Singapore’s strategy is to completely rebalance the structure of the healthcare system by providing right incentives for every stake holder.
The needy, Tharman argued, received more benefits than the taxes they paid. Tharman said the government keeps giving out transfers such as the Workfare, housing grants and GST vouchers that offset the GST. Tharman added that for every dollar of tax that the poor pays, “they get back at least S$5 in benefits, from childcare, all the way to retirement”. “Not every tax in a progressive system needs to be a progressive tax,” Tharman told, “In fact, that’s not an efficient system. Not every tax or benefit needs to be progressive but the system as a whole must (be progressive).”
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