Budget 2014: PAP Still Spends Too Little On Health For Singaporeans

Two days ago,  it was reported that Finance Minister Tharman Shanmugaratnam had said that, “The government’s projected healthcare spending is expected to triple to S$12 billion a year by 2020, up from S$4 billion in 2011.” It was also reported that, “Healthcare spending, he said, will reach S$8 billion in 2015.”

Sounds like a lot of money? Let’s do a rough projection.

We will make it simple – let’s compare the government expenditure with government expenditure.

It was revealed in parliament, thanks to a question by the Worker’s Party’s Gerald Giam, that the total health expenditure in Singapore had grown from $5.9 billion in 2002 to $13.1 billion in 2011 (Chart 1).

Slide1

Chart 1

It was also revealed that the government’s health expenditure grew from $1.6 billion to $4.1 billion (Chart 2). Notice the slower growth in the periods 2005 and 2006, and in 2010 and 2011.

Slide2

Chart 2

Finance Minister Tharman had projected that the government’s health expenditure will reach $8 billion in 2015. This means that from 2012 to 2015, the health expenditure would need to grow by an average of 18.35% every year. He also said that the government’s health expenditure will grow to $12 billion in 2020. This would mean that from 2016 to 2020, it would grow by a much slower 8.44% every year, on average.

Based on the projections, Chart 3 will show how the government’s health expenditure is expected to grow. You can see that after the expected General Election in 2015/16, the government’s health expenditure is expected to slow down significantly.

Slide3

Chart 3

Tharman might say that the government’s health expenditure would increase to $12 billion by 2020, but when you plot it out, this increase isn’t significant. Not only that, the PAP had planned for slower increases in their expenditure on health after 2015, but they didn’t want to spell this out – you have to do the sums to realise.

Now, let’s project how the total health expenditure is expected to grow. In the last 5 years, the total health expenditure had grown by an average of 10.5%. Based on this, the total health expenditure is expected to grow to $32.3 billion in 2020 (Chart 4).

Slide4

Chart 4

OK, enough of the maths. Now, what’s the significance?

The significance is this:

From 2002 to 2011, take a look at the percentage that the government would spend, as part of the total health expenditure – the highest it reached was in 2009 when the government spent 32% of total health expenditure (Chart 5).

Slide5

Chart 5

Mind you, 32% – not even one-third – is terribly low. In the other high-income countries, the average that their governments spend on health is 70% (Chart 6). This means that the Singapore government isn’t even performing to the halfway mark of what it should!

Slide6

Chart 6

So, the PAP might say that the government expenditure on health is expected to increase to $8 billion in 2015 and $12 billion in 2020. But what does this mean?

In Chart 7, you can see the projected government’s expenditure, as a percentage of the projected total health expenditure.

You can see that based on this projection, the government’s expenditure on health is expected to rise dramatically from the 31% in 2011 to 40.9% in 2015.

But after 2015, the government’s expenditure on health is expected to drop to 37.2% in 2020.

Slide7

Chart 7

So, the government might dramatise the increase of their expenditure to $12 billion in 2020. But when you look at the percentage, 37% is hardly what a responsible government in the developed world should do. As mentioned, the average that governments in the high-income countries would spend is 70%. At 37%, this is only half of what the government should be doing. This is nothing for the government to shout about.

In fact, it is very embarrassing that Singapore is now the most expensive place to live in, in the world, and we have one of the highest GDP per capita in the world, and yet the PAP can only do so little for Singaporeans. Then, where is all our money going? This is not forgetting that Singaporeans are paid the lowest wages among the high-income countries and if the PAP is so unwilling to help Singaporeans, this means that many Singaporeans would be suffering. Not surprising thus that we hear of many stories of how Singaporeans have chosen to die rather than seek medical treatment, right?

The government’s planned increase in expenditure to 40% is actually in line with what Health Minister Gan Kim Yong had previously announced, when he had said that the government would increase their expenditure “to about 40 percent and possibly even further, depending on various factors such as demographics, and our ability to manage healthcare costs and target our subsidies“.

But when you look at the projection, the government expenditure is expected to increase at a faster pace only until 2015. After 2015, the government’s rate of expenditure is expected to drop. So, how long will their “commitment” to 40% last?

What this means is the government is pushing to aim for 40% by 2015, but thereafter, will they renegade from this commitment and spend only 37%?

But why 2015? What is with 2015? And after 2015, Singaporeans don’t matter as much anymore? Or is it not necessary to appease Singaporeans after 2015? What will happen in 2015 that they need to try so hard to buy the votes of Singaporeans?

And also, no matter how you look at it, 37% or 40% – this is paltry and embarrassing that the government would still beat its chest over such a lowly 40% target. By spending only 40% on health, the PAP has renegade on its responsibility to provide adequate and affordable healthcare to Singaporeans. A high-income country should spend 70%. In fact, for countries with a similar GDP per capita as Singapore, they would spend 80% or 85%. This means that the PAP is severely underspending on health!

This is what the PAP is planning to spend

Not only that, the government has started to champion how MediShield is now a “universal” healthcare plan where all Singaporeans would be protected, but please, MediShield only accounts for 2% of the total health expenditure. No, you didn’t read wrongly – MediShield accounts for only 2 per cent. 2% is hardly universal. It’s pathetic. I recommend that the PAP brush up on its vocabulary before rubbing salt into the wounds of Singaporeans.

Slide8

Last year, it was estimated by Leong Sze Hian that the Singapore government had accumulated $28 billion in surplus last year, which had gone undeclared by the PAP – and not only that, had disappeared off the records. If we do a rough calculation of how much Singaporeans would need to spend out-of-pocket for healthcare last year, we would need to spend about $9 billion in 2013 (we had spent $8.1 billion in 2011).

So, even if the government were to cover fully for the $9 billion, so that all Singaporeans would have access to free and (truly) universal healthcare, we would spend only less than one-third of this additional undeclared surplus.

Slide10

So, there is more than enough in the government’s revenue to pay for Singaporeans’ healthcare needs, ensure that all Singaporeans are protected and have peace of mind. The government might want to scare us by telling us that there is not enough and that if we don’t spend prudently, we won’t be able to save. This is all utter nonsense when they choose not to declare and report an estimated $28 billion in surplus. Even if we provide free healthcare for all Singaporeans, the government would still have $19 billion left in surplus – a tons loads of money.

The question isn’t a matter of whether there is enough – Singaporeans are already paying a lot of tax. We actually pay 2 times more in indirect tax than personal income tax and 4 times more into CPF than personal income tax. So, the money is there. The question isn’t whether there is enough. The question is whether the PAP has the political will to protect Singaporeans.

It is silly and useless to dramatise the expected increase of the government’s health expenditure to $12 billion when, when you look at it as a whole, the expected increase of the government’s health expenditure is pathetic, embarrasing and a shirking of their responsibility.

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5 comments

  1. me

    I admire your diligence and patience at churning out one essay everyday! Keep up the fabulous and outstanding job!

  2. Judah

    Fighting for incremental changes will not change politics, nations and the world.

    You need to tell the mountain to go fly kite.

  3. The Pariah

    To quote Homer Simpson: Never under-estimate the power of stupid people in large numbers.

    To help these “people in large numbers” to open their eyes and apply their minds, I have a suggestion for you:
    Add two graph lines and your charts will paint a much starker reality.

    Perhaps you could consider correlating your chart on Healthcare Expenditure Increase to:

    (A) Line 1: Steep ageing demographics (assume a lag of, say, 5 years as it takes time to bring skills/infrastructure up to speed in healthcare – so 2007 expenditure correlated to age 65+ cohort in 2012); and

    (B) Line 2: Swift acceleration of foreigner deluge towards total population growth (again, apply the same 5-year time lag – the spike in Healthcare Exp in, say, 2005 when compared to the Foreign Tsunami in 2010).

    I dunno if Medical Tourism stats are available – that was another spanner that Khaw BW threw into the works to exacerbate the healthcare woes – he pushed for Medical Tourism WITHOUT building more hospitals in the past decade whilst simultaneously ranting about Silver Tsunami from 2005 onwards.

    IT IS NOT AS IF AGEING DEMOGRAPICS WAS UNFORESEEABLE OR A TOTAL SURPRISE. PM Lee HL had various Ageing Reports submitted:
    – Inter-Ministerial Committee (IMC) in 1999 and
    – Committee on Ageing Issues (CAI) in 2006.

    The Singapore phenomenon in 2014 of sticking patients in tents is NOT an isolated instance or an unforeseen consequence of epidemics or pandemics. It came about because of Minister Khaw BW’s legacy as a long-time MOH civil servant before becoming Health Minister. Yet – Sembawang GRC keep having (i) high PAP votes in GE and (ii) high votes for PAP’s preferred Presidential Candidate – Tony Tan – in PE. Now think about what Homer Simpson said, eh?

  4. Pingback: No, Lee Hsien Loong, You Be Kinder. | The Heart Truths

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