Social spending expected to rise with growing ageing population, need for continued education

SINGAPORE: Social spending, which has almost doubled over the last decade, is expected to go up in the upcoming Budget which will be delivered on Friday (Feb 16). 

Overall social spending rose from S$27.6 billion (US$20.5 billion) in 2014, to an estimated S$52.8 billion last year, according to annual figures from the Ministry of Finance (MOF).

The sharpest increase was in 2020, when spending rose by nearly S$10 billion from the year before, largely due to the COVID-19 pandemic. 

The healthcare sector accounted for the lion’s share of social spending over the last decade, ballooning from S$7 billion in 2014 to nearly S$17 billion last year. It replaced education as the largest component.

Most of this went into supporting a growing ageing population.

Higher spending on healthcare is expected as a society matures and develops, said Professor Paulin Straughan from the School of Social Sciences at Singapore Management University.

While Singaporeans are living longer, there is a big gap of about 10 years between life expectancy and health-adjusted life expectancy, said Prof Straughan, who is also director of the Centre for Research on Successful Ageing.

“We are not fully leveraging the potential of extended longevity. This explains the sharp increase in healthcare spending,” she told CNA’s Singapore Tonight on Wednesday.

“A lot of work ahead of us is on the preventive health front, where we try to level up and prepare ourselves for living longer and learn to take good care of our bodies and preserve our health so that we can close the gap between health-adjusted life expectancy and life expectancy.”

SPENDING ON EDUCATION, ASSISTANCE

Associate Professor Walter Theseira from the Singapore University of Social Sciences said while he does not expect a dramatic increase to be announced, health and education spending trends are likely to continue.

“We're talking about social services targeted at the middle-aged to the older population of Singaporeans. So we got healthcare going up. We have education being refocused away from basic and tertiary, towards adult continuing education, training, lifelong learning,” said the economist.

Education spending went up S$3 billion in the past decade, according to MOF figures.

However, the focus has shifted away from basic and tertiary education towards continuing education for adults, said Assoc Prof Theseira.

Spending on social and family development also more than doubled from S$1.8 billion in 2014 to an estimated S$4.2 billion last year with more assistance needed for lower-income families amid a rise in the cost of living.

“With the strengthening of social safety nets, there will be more continuing expenditure in that area as well,” said Assoc Prof Theseira, adding that there are expenses that are not always tracked under social spending, but which disproportionately benefit lower- to middle-income Singaporeans.

“These will be areas like labour-related transfers for the workfare income supplement programme, for the silver support scheme. These are not always tracked under social spending,” he said.

He added that other crucial areas to tackle include providing more support for those who are involuntarily unemployed and helping people out of a cycle of poverty.

SPENDING ON FAMILIES

One of the large expenses is making sure that Singaporeans are well-supported if they choose to have children, added Assoc Prof Theseira.

“They're not just for the baby bonus, but for things like government-paid parental leave,” he said. 

Prof Straughan, whose research interests include marriage and parenthood, said that on her wishlist for incentivising couples to have children is helping them manage work-life balance.

She said that the hybrid work arrangements that many have been able to adopt after the COVID-19 pandemic have helped.

“The next step really is to encourage young adults to prioritise and reprioritise their life goals, and (at) each stage of their lives, to recalibrate what a purposeful, successful life means,” she said.

This means that employers also need to learn how to recalibrate their expectations to prevent their employees from burning out, said Prof Straughan.

“Give them the time and space to grow and take care of things that are necessary and important in different stages of their life. And then as they move along, as children grow up and they become empty nesters, they will be the most loyal employees you will find in the company,” she said.