PRIME MINISTER Lee Hsien Loong yesterday took pains to explain the Government's reforms to the Central Provident Fund (CPF) scheme, saying it had a duty to act to address problems that would arise in the future.'This is something which if we did not do, it will not disturb us now, it will not affect the next election,' he told 550 grassroots leaders at a dialogue at the Grassroots Club in Ang Mo Kio.
'Nobody will blame us until we are 35 years from now, when the problem is here, then people will say, 'What kind of Government did we have 35 years ago, never took care of us today'.
'And I think it is our responsibility to make sure that we do that now.'
He was referring to the debate on the controversial new longevity insurance that requires those aged below 50 to buy an annuity that they will start collecting at 85, some 35 years later.
The Government, he said, could have put off introducing the reforms, as the impact of not doing so would not be felt for many years to come. But, as a responsible Government, it chose to act early and think long term.
While he accepted that the CPF reforms debated in Parliament last week were 'not easy to digest', he believed the changes were necessary and the right thing to do.
'I think it will benefit many Singaporeans, especially the low-income ones.
'It is not something which is going to make a difference overnight because we are talking about when we grow old, and we are talking about 10, 15, 20 years from now,' he said.
The CPF changes, first announced by Mr Lee at the National Day Rally last month, cover three aspects.
These are: An extra one percentage point interest for the first $60,000 in the accounts, a delay in the draw-down age of the Minimum Sum from 62 to 65 and the compulsory longevity insurance.
Parliament spent three days debating the proposals last week, and yesterday's session was a follow-up to address concerns from grassroots leaders.
The 21/2-hour dialogue covered a range of topics, from doubts over whether people really lived long lives to housing and medical needs of the old. Nearly half of the 22 questions were on the longevity insurance issue.
Throughout, Mr Lee and his team of ministers sought to explain complex issues in simple terms, relating amusing anecdotes of people they had met and tossing in earthy phrases to make their points. They also released a cartoon DVD to help get the message across.
Asked what the point of longevity insurance and having so much money at age 85 was, when one might be bo-geh, or toothless in Hokkien, Mr Lee replied, to laughter: 'Bo-geh, you cannot enjoy. But bo-geh, bo-lui (no money) is worse.'
Turning to the issue of CPF interest rates, Mr Lee said the Government should be very careful in taking up calls that had been made for higher returns because that would also mean higher risks with members' money.
Noting that some had hit out at the Government for using their CPF funds as 'cheap money' for its investments, Mr Lee said: 'Some people say...Government wants cheap money to go and make a profit. We do not have to make cheap money. This is not that kind of government.'
Mr Lee added that the CPF was just one piece in an entire package catering to Singaporeans' retirement needs.
Second Finance Minister Tharman Shanmugaratnam, who was among five other ministers present, fleshed out the details. Responding to a participant who asked for more goodies, he said that 'at least one-third' of a lower-income Singaporean's retirement savings already came from the Government.
Most of this funding went into Housing Board flats, which, he added, appreciated over time.
'So, this is a Government that actually has been helping people build up savings for retirement,' he said.
In addition, there are the Workfare income supplement, ComCare public assistance fund and education subsidies like the Post-Secondary Education Account, which will deposit $400 for all Singaporeans aged seven to 20 from next year, helping them with further studies.
Manpower Minister Ng Eng Hen said that the proof of it was in the money the Government spent on Budget surpluses and goods and services tax offset packages since 2001 - $11.7 billion.
Admiralty constituency's youth executive committee chairman Jordan Ang, 29, said after the session: 'The picture is clearer now and makes it easier to explain to residents.'
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