'Yes, we need retirement villages'

Feb 22, 2012
 
THE ST INTERVIEW

Few housing options for the old in S'pore, says senior-living consultant
 
By Radha Basu

LAST Friday's Budget bestowed a hamper full of goodies on older Singaporeans.

Families caring for the frail elderly are in for a windfall, with more state subsidies for care in community hospitals, nursing homes and even at home. For the first time, even the richest can get state subsidies for stays in community hospitals.

In this 'season of plenty', it may seem politically incorrect to talk about some seniors who feel short-changed about retirement options.

But international senior-living consultant Tan Kee Hian, 57, believes this is as good a time as any to discuss the relative shortage of living choices for Singapore's growing group of more affluent, older folk.

He says many seniors in the top fifth to 20th percentile of the income scale would gladly part with their savings to live in retirement villages (RVs) which offer professional care and support services such as an on-site round-the-clock emergency response system.

While such communities are common in most developed countries, there are none in space-starved Singapore. Both the public and policymakers seem to prefer 'ageing in place' - where people live out their last years in the community rather than in institutions.

But Mr Tan says that while boosting community resources to enable the majority to age in place is a 'basic necessity' here, no one solution can fit the needs of all seniors.

'Ageing in place assumes that everyone has similar needs - and that's a very big assumption. Given the diversity of our First World society, we deserve more choices.'

The veteran management consultant is convinced there is a need and even a demand for Western-style retirement villages, and hopes to develop Singapore's first such project.

He says those who argue that there is absolutely no demand for retirement villages here are divorced from reality.

'If you repeat a myth often enough, it gets mistaken for a fact.'

Over the past two years, he has rigorously researched and written a proposal for a $70 million to $80 million retirement living project in Jalan Jurong Kechil, a site the Government has earmarked for the purpose.

All he needs is an investor who is willing to put in up to $25 million. The rest will be made up by bank loans and he is willing to put his cost calculations up for thorough scrutiny.

The Harvard Business School-trained expert says he has done his homework and pulls out a consultant's most handy tool: statistics.

A survey of 3,000 baby boomers, commissioned by the Ministry of Community Development, Youth and Sports (MCYS) and released in 2009, showed that one in four would not mind living in a retirement village.

Significantly, that is far higher than the 12 per cent of older folk who actually live in such communities in countries like the United States.

There are nearly a million baby boomers here, born between 1947 and 1964. The first cohort turns 65 this year, which Mr Tan sees as an 'inflection point' in this nation's history.

Singapore's population of those aged 65 and above is set to double to 600,000 over the next decade and triple to nearly one million by 2030 - that's a faster rate of ageing than in virtually every other nation in the world.

He says some demographic micro-trends have reinforced the need for RVs.

 -   The number of older folk here who live alone or with their elderly spouse doubled to nearly 100,000 between 2000 and 2010.

-    The number of those who have mobility problems and are 'semi-ambulant' has also doubled to around 36,000.

-    The exploding numbers of these two groups - which have traditionally formed the core client base of retirement communities overseas - have far outstripped the overall growth in the senior population, which increased by around 50 per cent to 344,000 over the past decade.

The exploding numbers of semi-ambulant seniors are a particular concern for Mr Tan, who is a baby boomer himself.

Although they are in relatively good health, they may end up living in expensive nursing homes simply because they are immobile.

'Most such patients overseas would be living in retirement communities, saving their health-care institutions taxpayer dollars.'

Mr Tan, who returned to Asia in 2006 to be near his ageing parents after 35 years in Europe and the US, points out that he is often asked why he wants to 'break up families and hurt inter-generational ties' by advocating RVs.

'Just look at the statistics,' he says. 'The number of older folks who want to live by themselves may well explode. And as things stand now, many may not be getting the services they need.'

Indeed, growing groups of seniors either do not have children or do not want to depend on them as they age. Many - like Mr Tan himself - have children who live and work overseas.

Small wonder then that, according to the baby boomers survey, nearly 75 per cent of all respondents - and 85 per cent of university graduates - said they wanted to live on their own during their golden years.

About a third of those aged 65 and above already do so now.

But even if the demand is there, will older people have enough savings to pay for such resources?

Mr Tan reckons they will. Singapore, after all, has the highest proportion of millionaires in the world, with one in six households on that rich list. The number of those who earn above $10,000 a month has increased by nearly three-fold to 140,000 in a decade.

According to the MCYS survey, 12 per cent of baby boomers - or potentially 120,000 people - have gross monthly incomes of $7,500 and above.

Interestingly, the father of two acknowledges that it is not the Government but the private investors who should test the market by setting up Singapore's first retirement village.

To be fair, the Government has already taken the initiative to inject some variety in elder-living options, particularly those that cater to middle- to lower-income Singaporeans.

On Sunday, it launched Singapore's first group home for low-income elderly, where small groups of older folk who have little or no family support can share rental flats.

The Housing Board (HDB) has ramped up the supply of studio apartments for the elderly - and latest take-up rates are above 90 per cent.

Meanwhile, MCYS recently piloted 'seniors service centres' for residents in these apartments, providing information and referral services, organising social services and responding to emergencies.

But what these facilities do not cater to yet is more 'sophisticated needs', says the professional, who would love to live in such a facility one day.

For instance, there are no provisions for on-site nursing care.

There are older folk, for example, who may want care facilities within their condominiums - rather than in the neighbourhood. Some might not want to - or be able to - walk even 400m to the nearest polyclinic.

'A retirement village combines elder-friendly housing with care and community engagement services, together with professional management,' says Mr Tan. 'And no facility in Singapore currently provides all three.'

While senior activity centres might provide referral services, they certainly don't have a 'village manager' whose primary duty is to ensure the well-being of seniors living in his village.

So given that there seems to be a market demand, why has no developer bitten the bullet so far?

Mr Tan believes there is a 'fundamental mismatch' between what property developers traditionally do and what seniors want.

Developers want to sell houses, but seniors want to buy care; developers want to build, sell and move on; seniors want a provider who will stay and ensure a specified quality of care and services for the rest of their years - for many, many years.

'Developers love more of the same, but a retirement community is really a new market space,' says Mr Tan. 'We need a new breed of champion investors - and I hope we find them fast.'

radhab@sph.com.sg

What opposition voters want: PAP II

Feb 5, 2012

In his new book, Breakthrough: Roadmap For Singapore's Political Future, academic Derek da Cunha analyses last year's General Election, during which a Group Representation Constituency fell to the opposition for the first time and the People's Action Party's vote share fell to a record low. This is an excerpt from the book:

One of the messages of GE2011 which has been in chime with previous elections since 1991 is that a large part of the electorate desires an opposition that does not differ too markedly from the People's Action Party (PAP).

The electorate wants an opposition that largely moderates PAP policies and does not attempt to initiate a marked change from the current form of governance. Too marked a difference from the PAP would result in some portion of middle-ground voters who voted for the Workers' Party (WP) in the 2011 election returning to the PAP.

Indeed, middle-ground voters appear to want incremental, and not radical, political change. Therefore, the WP's objective post- GE2011 has to be to continue to reach out to more middle-ground voters and attempt to achieve some dominance in that sphere of the political spectrum.

What if there had been no Toh Chin Chye?

Feb 4, 2012

At a crucial moment in PAP's history, he made all the difference

By Sonny Yap

In the beginning there was Toh Chin Chye.

He was there at No. 44 Bryanston Square in London where he joined a group of fellow university students in the Malayan Forum questioning British rule and seeking independence for a united Malaya and Singapore.

He was there in the basement dining room of No. 38 Oxley Road in Singapore where he huddled with the house owner named Lee Kuan Yew and other professionals, trade unionists and workers to hatch plans for a new left-wing political party.

He was at the Victoria Memorial Hall now known as the Victoria Concert Hall where he chaired the inauguration meeting which introduced the People's Action Party (PAP) and its white-garbed leaders to Singapore.

And he was right there at the Raffles Institution counting centre at Bras Basah Road when the final votes were tallied for the May 30, 1959 General Election which saw the PAP capturing 43 out of 51 seats to form the government of self-governing Singapore.

Insight: What price a minister? 42 years of controversy

Straits Times, Jan 6, 2012

Insight looks through records of parliamentary debates to find out when ministerial pay first became a contentious issue, and how the debate has shifted over the years

By Andrea Ong

The PAP's Aljunied dilemma

Dec 20, 2011

By Rachael Chang

THIS year, the word Aljunied entered into Singapore political lore, replacing the near-miss of Cheng San with reality, and joining other constituencies in the annals of history.

These include Anson, Hougang and - evidence that the political winds blow both ways - Potong Pasir, which is now back in the hands of the People's Action Party (PAP).

For the next five years at least, Aljunied GRC - the first to be won by an opposition party - will also be the pea under the princess' mattress for the PAP.

Now that the shock of losing a GRC earlier than expected is wearing off, the PAP must confront an unsettling question - what next?

Beware the inequality trap

Dec 14, 2011

Singapore should consider more inclusive approach to social spending
 
By Donald Low & Yeoh Lam Keong

INCOME inequality in Singapore has risen significantly in the last decade. Whether measured by the Gini coefficient or by the ratio of incomes between the top and bottom 20 per cent, the evidence points to a more unequal society. Government redistribution in the form of taxes and transfers has not slowed the increase in inequality sufficiently. According to the Ministry of Manpower's data on employed citizens, Singapore society after government redistribution is more unequal today than it was 10 years ago before government redistribution, as measured by the Gini coefficient.

Not only is income inequality rising, there are also certain aspects of Singapore's inequality patterns that make it especially worrying. To begin with, the increase in income inequality is accompanied by wage stagnation for some segments of the workforce. Between 2001 and this year, the median incomes for full-time employed citizens increased by just 11 per cent in real terms, while the 20th percentile saw no increase at all. Including part-time workers would likely show wage stagnation extending to a much larger proportion of the workforce.

Second, there are concerns that social mobility in Singapore has declined. Inequality is more tolerable if social mobility is high. Policymakers have tended to place greater emphasis on social mobility when discussing rising inequality, arguing that the former ameliorates the effects of the latter. But cross-country evidence suggests that more equal societies are also more mobile. Even if policymakers care mainly about equality of opportunity, they cannot ignore distributional concerns altogether.

Third, as a growing wealth of research indicates, people's well-being is affected as much by inequality - or relative incomes - as absolute incomes. Even if absolute incomes are rising across the board, rising inequality alone reduces subjective well-being.

Fourth, a more unequal distribution also makes it more difficult to have coherent policies that all segments of society can rally behind. Income stratification, especially if it is combined with low social mobility, may polarise societies as different income groups begin to see their interests as conflicting.

Singapore's social policies - founded on the ideas of individual responsibility, economic growth and jobs for all, and a social security system that emphasises savings and home ownership - have served Singaporeans well. They have enabled Singapore to achieve 'growth with equity' and delivered high standards in education, housing, health care and social infrastructure without imposing a huge burden on public spending.

But in the face of significant changes in Singapore's operating context - globalisation, rapid technological change, a maturing economy, an ageing population, greater economic volatility, and a more uneven distribution of the fruits of growth - Singapore's social compact needs to be re-examined and reformulated.

Targeted v inclusive approaches

IN MUCH of the policy discourse on inequality, the emphasis in Singapore has been on what (more) the Government should do for the poor. The implicit assumption here is that the state's role should be confined to poverty reduction, and that inequality by itself does not merit policy action.

This is consistent with the Anglo-Saxon or 'residual' model of social welfare. In this approach, social transfers are means-tested rather than universal. This model also envisages a smaller, less redistributive state since the aim is not to achieve more equal outcomes but to ensure no one falls below a certain absolute level. It is therefore ambivalent about the need for more government redistribution in the face of rising inequality.

Policymakers in Singapore generally subscribe to this more targeted approach of social welfare. They believe that government assistance should be limited, that it should help only those least able to afford basic services. The case for this residual model of social welfare is augmented further by the emphasis on the family as the first line of defence after the individual has exhausted his means, and by concerns over the fiscal sustainability of inter-generational transfers.

A second approach, favoured by the northern European countries, espouses the principle of inclusion and relies more on universal programmes that benefit the large majority of their populations.

These systems emphasise the government's role in redistributing incomes, and in fostering solidarity and social trust. Social scientists mostly accept that trust is correlated with a number of normatively desirable things. For instance, people who believe that most other people in their society can be trusted are more inclined to have a positive view of their public institutions, to participate more in civic organisations, to give more to charity, and to be more tolerant towards minorities and people not like themselves.

More inclusive universal social programmes raise social trust in at least three ways. First, because such programmes are more redistributive than means-tested ones, they result in lower levels of economic inequality after government taxes and transfers are taken into account. Second, since inclusive programmes are based on the principle of equal treatment, they increase the sense of 'equal opportunities' more so than means-tested programmes. Third, means-tested programmes often accentuate class divisions within a society, and lead to less trust. By contrast, inclusive programmes enhance solidarity and the perception of a shared fate among citizens.

Despite their appeal, inclusive and more universal social programmes that promote trust may be hard to establish in societies with already high inequality.

This is partly because these programmes often extend benefits to better-off groups which can be difficult to justify. Such societies may find themselves stuck in an inequality trap characterised by low levels of trust, an aversion to more inclusive and universal social programmes, and increased reliance on targeting to differentiate between those entitled to benefits and those who are not.

To be sure, inclusive universal social programmes have their costs too.

Broad-based benefits in child care, health care, elder care, pensions and unemployment protection cost more than means-tested ones. In northern European countries, generous benefits have to be financed by a wide range of higher taxes.

But policymakers should weigh the costs of inclusive universal programmes against their benefits in terms of fostering norms of fairness, and in promoting social trust, citizenship and solidarity. Whether the costs of such programmes exceed their benefits is an empirical, rather than theoretical, question.

Relevance for Singapore

IT WOULD be easy for Singaporean policymakers to dismiss the inclusive approach to social spending as too costly, too corrosive of Singapore's work ethic and too undermining of competitiveness. In Singapore's multi-ethnic context, given its heavy reliance on foreign investments, policymakers may argue that Singapore cannot afford the aggressively redistributive model of northern Europe.

Notwithstanding differences in contexts, there are still important lessons that the more universal approach offers Singapore. The first is that when designing social programmes, the traditional objectives of efficiency and getting incentives right should be complemented with an understanding of the norms that inclusive social programmes may help to foster.

In theory, means-tested programmes limit moral hazard and 'deadweight funding'. In practice however, they often result in high administrative costs, divisiveness and rent-seeking behaviours. For instance, the British government's efforts in the early 2000s to means-test state pensions resulted in people saving less so as to qualify for higher entitlements.

Pursuing a more inclusive approach to social spending in areas such as early childhood development, unemployment protection, health care and long-term care could strengthen norms of fairness, promote social trust and foster an egalitarian ethos. Within this approach, benefits can be structured progressively.

In elder care for instance, instead of only targeted subsidies, a basic tier of benefits could be considered for all older citizens who require long-term care, combined with means-tested ones for those with lesser means.

Second, policymakers should analyse social policies in terms of cost effectiveness, not just cost containment. A cost containment mindset focuses on keeping social spending as low as possible in the fear that transfers, once provided, fuel an insatiable demand for more. However, the key question is not how Singapore can keep social spending on a tight leash, but what kinds of social spending deliver the largest benefits and how an appropriate balance of universal and targeted policies can be designed. Applying this approach may well result in social policy choices quite different from the ones today.

Singapore's own history also suggests that large-scale, inclusive social programmes have generated the largest benefits. Its public housing programme, the heavily subsidised basic education system, and the large investments in public health, water and sanitation were largely universal. They fostered a sense of citizenship and helped to create the social conditions that supported economic growth.

Singapore needs the same boldness of using public monies to achieve desirable social ends to be applied to the policy challenges of today - an ageing population, wage stagnation, rising inequality and increasing health and long-term care needs. A narrowly targeted approach to these challenges may enable the government to maintain healthy surpluses, but would also result in missed opportunities to improve the welfare of citizens and bolster social trust. To avoid the inequality trap, Singapore needs not just expanded social safety nets, but also more inclusive ones.

The writers, both of whom used to work for government agencies, are vice-presidents of the Economic Society of Singapore.

In search of a new narrative

What story of the PAP's role in society can help it better connect with Singaporeans today? Insight identifies themes that might form part of its new narrative.
18 Nov 2011

By Janice Heng & Rachel Chang

COME next Sunday, over a thousand People's Action Party (PAP) cadres will gather for their first party convention since the May General Election.

Prime Minister Lee Hsien Loong will make a keynote speech, which is expected to answer some of the questions that have surrounded the ruling party since former foreign minister George Yeo said in May that it was in need of 'transformation'.

Two days later, he lost his Aljunied GRC seat. The PAP would see its national vote share fall to 60.1 per cent, the lowest since Independence.

In the early hours of the morning, after the electoral scorecard was released in full, Mr Lee told the press that 'soul-searching' was on the cards for the PAP.

Some of the conclusions that exhaustive rumination over the last six months have yielded will be made known to the party rank-and-file - and the public - next week at the convention.

Mr Lee is likely to reveal key findings from the PAP's post-mortem report of the GE, put together by a 12-man committee headed by National Development Minister Khaw Boon Wan.