More tax breaks, parental leave to boost Singapore's birth rate
By Wong Siew Ying, Channel NewsAsia | Posted: 20 August 2008 1357 hrs

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SINGAPORE: More tax breaks, cash payouts and parental leave will be given to encourage Singaporeans to welcome 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.

Finance Minister Tharman Shanmugaratnam said: "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 2 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 below the age of seven. The first 3 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.

Wong Kan Seng, Singapore's Deputy Prime Minister and Minister-In-Charge of Population Matters, said: "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$3,000 to S$4,000 for the first and second 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 a month for full-day care, while non-working mothers will get S$150.

More details are available on the Marriage and Parenthood website.

What more can be done to get Singaporeans pro-creating? Give us your views at www.channelnewsasia.com/maybebaby.

- CNA/yb