With the proportion of citizens aged 65 and above rising to 18.4% in 2022, a 11.1% spike from 2012, Singapore is one of the nations that is ageing at the quickest rates in the world. Singapore is now in Stage 4 of the Demographic Transition Model, characterised by low birth rates and high life expectancies, leading to an ageing population.
An ageing population increases pressure on our healthcare sector, calling for increased government expenditure on expanding healthcare. Let’s dive into some possible solutions for this increasingly urgent issue.
The prevalence of chronic diseases such as diabetes, stroke and heart disease increases with ageing. Additionally, senior citizens often need to regularly visit clinics for health check-ups due to their increased susceptibility to such diseases. Consequently, an increasing ageing population will demand for an expansion in local healthcare systems, which increases the public healthcare cost for the Singapore government.
Simply put, more money needs to be directed towards rapid development of Singapore’s healthcare sector. The government could directly borrow this money from federal reserves as fiscal deficit – but that invites an entire myriad of problems. To repay this debt, the government would have to increase the circulation of money, adding on to Singapore’s inflation rate of 4.1%, while the Federal Open Market Committee has advised that a 2% inflation rate is ideal.
The solution for this would be to boost government revenue, by increasing taxes in the form of the Goods and Services Tax (GST) hike. The Ministry of Finance has implemented an increase in GST from 7 to 8 percent, starting from January 2023, and the GST will increase from 8 to 9 percent, starting from January 2024. This will increase government revenue heavily, allowing for more government expenditure on expanding the healthcare sector in Singapore.
Though it may initially seem unpleasant to me and you, this GST hike may actually be a boon in disguise for the majority of the population. Obviously, expanding the healthcare sector in Singapore allows for more efficient social services for citizens. Additionally, at the same time, it will reduce unemployment, as more jobs are created in the form of construction workers, nurses and doctors. So when you lament about an increased GST, you might want to think once again.