The PAP government has taken too many shortcuts and is in …. deep shit.
With an ageing population, ie impending massive CPF withdrawals, CPF was certain to face a collapse between 2001 and 2019 when hundreds of thousands of baby boomers turned 55.
To prevent the inevitable, PAP legislated the Minimum Sum scheme in 1987 and forced additional billions into CPF annually. As this was still insufficient to offset the impending CPF withdrawals, PAP subsequently resorted to postponing the withdrawal age to 65.
This itself created another set of issues which required legislations to be further tweaked: it resulted in the government paying CPF members – in arbitrarily computed monthly installments – until we are 6 feet under.
The CPF scheme is inherently very unstable and members should expect more CPF changes akan datang, or face certain collapse.
One easy way to delay the inevitable is to increase the population. And that was precisely what easy-ways-to-economic-growth Lee Hsien Loong did immediately after he became PM in 2004 (chart below).
From 2004 to 2016, Singapore’s foreigner population has increased by almost 1.1 million, no thanks to PM Lee.
(Foreigners include PRs)
Every year, more than 10,000 PRs leave permanently; the Singapore PR has been treated as a piece of tissue paper. But this works perfectly fine for PAP because many former PRs do not withdraw their CPF balances which pay higher interest rates. As a result, it helps to delay the impending CPF implosion.
Whenever the economy experienced a severe downturn, CPF net contributions (excluding interest from GIC) dwindled and had even turned negative (see image below).
But during the GFC, net CPF contributions actually increased. This was partly due to the huge influx of foreigners which has helped to increase CPF net contributions by more than 300% since PM Lee took over from Lau Goh.
PAP’s population policy has nothing to do with mitigating our low TFR because it is now lower than it was 31 years ago. In fact, I have queried the NPTD and it does not have any supporting evidence to prove its population policy has worked.
Clearly, PAP has been increasing the foreigner population not only to generate economic growth but also to prevent a total collapse of CPF.