Any reform of the CPF scheme needs to concurrently look at healthcare and public housing reform. SDP’s Dr. James Gomez made this key point during a video forum organised by The Online Citizen last Saturday.$CUT$
Pointing to two of the party’s policy papers on healthcare and public housing, Dr Gomez, who stood as SDP’s candidate at the Sembawang GRC in 2011, explained the SDP’s holistic approach to tackling the burden currently placed on CPF monies.
He pointed that the present system forced CPF members to use their retirement savings to pay for their medical bills and housing loans.
Such an arrangement is ultimately unsustainable as CPF savings are depleted leaving retirees with little or nothing to survive on.
The solution, Dr Gomez pointed out, is to de-couple healthcare and housing costs from the retirement fund.
Under the SDP’s healthcare plan, a universal health insurance will replace the current 3M system of Medisave, Medifund and Medishield. Through an annual payment of an average of $400 a year into a national fund, Singaporeans will have 90 percent of our basic health, accident and pregnancy expenses covered.
Under this scheme, all Medisave monies will be returned back to one’s Ordinary Account which will release a substantial amount of funds back to CPF for retirement purposes.
Read The SDP National Healthcare Plan: Caring For All Singaporeans
Similarly, with regards to public housing, the SDP will introduce a Non-Open Market (NOM) flat scheme where HDB flats will be priced at cost minus land costs. This will lower prices of flats substantially to $70,000 for 2-room flats and $240,000 for 5-room flats.
Hence, the extraction of large tranches of monies currently to pay for the high cost of public housing will be very much reduced. This once again will result in large amounts in CPF that can be projected for retirement purposes.
NOM flat-owners can only sell their flats back to HDB and not on the open market. Those who wish to buy and sell their flats on the open market can continue to do so.
Read Housing A Nation: Holistic Policies For Affordable Homes
Dr Gomez highlighted the fact that under the PAP’s system, a large bulk of CPF monies are expended on healthcare and housing, and as a result the high forced-savings rate does not translate into adequate retirement funds.
With the SDP’s policy innovations in healthcare and housing, Dr Gomez said there will be more funds for Singaporeans when they retire.
The SDP will also honour the promise of returning to CPF members all their savings when they retire.
Another SDP participant in the forum was Professor Paul Ananth Tambyah who reiterated the point that under the proposed Medishield Life, the Government would still depend on using the CPF to fund healthcare expenditure. This would further deplete CPF savings and put our retirees in a vulnerable financial position.
The SDP will push for our alternative ideas on the CPF system which will benefit Singaporeans and take care of their well-being.