Pioneer and Merdeka Generation Packages are fair as seniors did not enjoy rewards S’pore reaped today: Heng

SINGAPORE — It is “fair and appropriate” to provide the Pioneer and Merdeka Generation Packages as seniors in these cohorts did not benefit fully from the investment rewards and social safety nets that Singapore has today, stressed Finance Minister Heng Swee Keat on Thursday (Feb 28).

Amid questions and criticism over whether similar packages would be provided for future generations and who would shoulder the cost, Mr Heng pointed out that the Pioneer Generation Package (PGP) and Merdeka Generation Package (MGP) would not burden the younger generations and were provided in a calibrated manner.

“It is a plan that has been carefully studied over a significant period of time. Not many countries in the world had gone through a similarly compressed period of accelerated growth, leading to relatively wide divergences between the older and younger generations,” Mr Heng said in his Budget wrap-up speech after more than two days of debate in Parliament.

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  Everyone has benefited from Budgets, and people are at centre of Govt's plans: Heng Swee Keat

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“Building on our substantial base of permanent healthcare schemes, a calibrated cohort-based approach is fair to different generations.”

Following the announcement of the S$6.1 billion MGP last week, both Members of Parliament (MPs) as well as analysts have questioned the fairness and sustainability in having such packages. 

However, the MGP fund is slightly lower than the S$9 billion set aside for the PGP. 

During the Budget debate, Workers’ Party chief and MP Pritam Singh said that such packages lead to “inherent inequality for some of our senior citizens who, by virtue of their year of birth, stand to miss out on a few years of medical benefits because of the interval between one-time packages”. 

He proposed that the Government instead provide a “universal and permanent” senior citizen healthcare package for all Singaporeans from the age of 60.

In her commentary in The Straits Times, sociologist Teo You Yenn similarly pointed out that introducing one-off, cohort-based rewards was “arguably, not a principled, sustainable, or solidarity-enhancing way to protect people in retirement”.

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Acknowledging there have been “questions, in and outside of this House” on whether the Government would or should have such packages for future generations, Mr Heng added: “Some have asked in anticipation. Others asked because they were worried about ‘who pays?’”

“If we continue to take a responsible and long-term approach to planning, younger Singaporeans need not fear that they will end up with a disproportionate share of the cost.

“But if we lose this discipline and make rash promises, like universal benefits regardless of circumstances, I would worry for our future generations.”

Seniors in both Pioneer and Merdeka generations did not enjoy the rewards Singapore has reaped today and they were at a disadvantage in terms of education and income, hence Mr Heng said a “cohort-based approach to support them in their silver years is appropriate”.

“You can say we custom-made the packages to better meet their needs. For the younger cohorts, they too will have needs, but they are not of the same nature as the Pioneer or Merdeka generations,” he told the House.

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Unlike the previous generations, the majority of the younger Singaporeans today can progress to post-secondary education, with more than nine in 10 youths doing so.

Conversely, fewer than two in 10 among the youngest in the Merdeka generation cohort could do so. About one in 10 of the country’s pioneers made it to post-secondary education.

Mr Heng said that the younger generation also have various healthcare schemes — MediSave, MediShield Life and CareShield Life — in place to better support their medical needs by the time they reach retirement age.

“Of course, some among us will still need more help. The Government will look at the needs of each group, and tailor our policies and programmes in the future,” he added.

In response to Mr Singh’s comments that he had received feedback that the introduction of the MGP is linked to the upcoming polls, Mr Heng reiterated that such packages are neither linked to election cycles nor the unexpected surplus for this term.