National Day Rally 2019 — On Retirement, CPF, Education & More

national day rally 2019

Shortly after Singapore’s 54th birthday, Prime Minister Lee Hsien Loong made his National Day Rally 2019 speech last night (18 Aug 2019), with Singapore’s game plan for the year(s) ahead.

PM Lee opened his speech with the lighthearted Bicentennial Experience exhibition at Fort Canning Park, before announcing enhancements in education subsidies, changes in retirement and re-employment ages and CPF contributions, and the development of a new Greater Southern Waterfront. If you only “kaypoh” policy changes, that’s the bulk of it.

The rest of the speech addressed threats like imminent climate change and US-China tensions, as well as the implications for Singapore.


National Day Rally 2019 — 7 key announcements PM Lee made

Here’s a quick round-up of the key announcements this National Day Rally 2019:

  1. Enhanced pre-school subsidies
  2. More affordable tertiary education
  3. Increase in retirement and re-employment ages
  4. Increased CPF contributions for older workers 
  5. Measures to tackle climate change 
  6. US-China tensions and impact on Singapore
  7. Building the new Greater Southern Waterfront 


1. Pre-schools to be more affordable with raised income ceilings for subsidies

  • Increased income ceiling for preschool subsidies, from $7,500 to $12,000 per household per month
  • Increased spending on early childhood education
  • More government-funded preschools
  • Set up National Institute of Early Childhood Development
  • KidSTART programme to expand from 1,000 to 5,000 children

It seems that pre-school is the new primary 1, as more resources are pumped into “giving our young the best possible start in life”.

To help more middle-income families afford preschool education, the income ceiling for means-tested subsidies (Additional Childcare Subsidy) will be raised from $7,500 to $12,000 per household per month, which is a significant 1.6X more.

To put things in perspective, that’s estimated of 30,000 more households that qualify.

Do note, however, that this is only for mums who work more than 56 hours a month. Sadly, non-working mums who don’t meet the criteria — regardless of household income — do not qualify.

This is on top of the Childcare Basic Subsidy, which is for all Singaporean Citizens with children enrolled in ECDA-licensed centres. For more information on childcare subsidies in Singapore, read here.

Additionally, PM Lee announced plans to “more than double” spending on early childhood education from $1 billion over the next few years.

A new National Institute of Early Childhood Development will be set up, and eventually, they hope to increase the number of government-supported pre-schools from 50% to 80%.

PM Lee likens this approach to that of housing and healthcare, where there are quality, affordable options (HDB flats and public hospital) for those who need it.

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2. Lower course fees and higher bursaries for tertiary education (universities and polytechnics)

  • Increase in university bursaries from up to 50% to 75% of courses
  • Increase in polytechnic bursaries from up to 80% to 95% diploma courses
  • Students in government-funded courses in ITE, NAFA and LASALLE will also be covered
  • Lower school fees for SIT and SUSS, from $8,000 to $7,500
  • Increase in subsidies for lower-income NUS and NTU medicine degree students, who will only pay $5,000 per year

According to PM Lee, much more will be done to improve the affordability of tertiary education in Singapore.

For starters, the Singapore Institute of Technology (SIT) and Singapore University of Social Sciences (SUSS) will lower their fees from around $8,000 to $7,500 per year.

University course bursaries will also increase from up to 50% to 75%. Presently, general-degree university fees are around $8,000 per year. Assuming maximum bursary (75%), eligible students will now only need to pay $2,000 (25%) instead of $4,000 (50%).

The same will be done for polytechnic courses: Diploma course fees are now about $3,000 per year. With the old scheme, the maximum bursary is 80% (students pay $600 or more). With the enhanced policy, bursaries will go up to 95% (students pay as little as $150).

In particular, PM Lee singled out the most expensive degree in university, medicine. Presently, after subsidies, it still costs about $29,000 /year at NUS and $35,000 /year at NTU.

In bid to encourage more lower-income students to pursue medicine, medical bursaries will be adjusted to be much more generous than other courses.

PM Lee did not go into the specifics, but said that lower-income students will be expected to pay as little as $5,000 per year, with the rest covered by student loans and bursaries.

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3. By 2030: retirement ages raised from 62 to 65, re-employment age raised from 67 to 70

  • Retirement age to increase from 62 to 65 by 2030 (affects those born on or after 1 Jul 1960)
  • Re-employment age raised from 67 to 70 by 2030 (affects those born on or after 1 Jul 1955)

All the sous vide meat and acai bowls we’re eating must be working its magic, because Singaporeans are now living longer than ever.

… yay, I think?

Life expectancy birth is now longest in the world, at nearly 85 years. We currently have 1,300 centenarians, who are people above than 100 years old.

So to help Singaporeans “work longer as we live longer”, they’ve raised the retirement and re-employment ages.

Currently (2019)  2022 2030
Retirement age  62 63 65
Re-employment age 67 68 70

PM Lee says that the government will take the lead, so for public officers, the changes will take effect 1 year earlier (2021).

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4. Increased CPF contributions for older workers age 55 and up, starting 2021

  • CPF contribution rates to increase for workers age 55 and up, starting 2021
  • Part of a 10-year plan to eventually raise CPF rates until 60 (instead of 55) before it starts tapering down until 70 (instead of 65)
  • No changes to CPF withdrawal policies

On a related note, CPF contribution rates for older workers will be raised gradually over “10 years or so” (depending on economic conditions).

These are the present CPF rates:

Age of employee CPF contribution by employer CPF contribution by employee Total CPF contribution rate
Up to 55 years old 17% 20% 37%
55 to 60 years old 13% 13% 26%
60 to 65 years old 9% 7.5% 16.5%
Above 65 years old 7.5% 5% 12.5%

Currently, the total CPF contribution rate is 37% for workers up to age 55. After that, it tapers down gradually, before levelling off at age 65, at 12.5%.

With the new announcement, those age 55 and up will be the first to have their CPF raised from 2021 onwards. By the end of the changes, those age 60 and below will get the full CPF rate.

If that sounds confusing, just know that the 10-year plan is for Singaporeans to make the full CPF contribution until age 60 (instead of 55 now). After that, it will decrease until you are 70 years old, when it “stabilises”.

PM Lee did not announce how the increase will take place, specifically how much more employers and employees will have to contribute.

For further reading on CPF in Singapore, check out our CPF Guide To Interest Rates, Minimum Sums And All The Calculators You Need.

Ending off the segment, PM Lee clears the air amid ongoing rumours, clarifying that there will be no change in CPF withdrawal policies and ages. You can start withdrawing money at 55, and start your CPF payouts at 65.

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5. Measures to tackle climate change — global warming, rising sea levels

  • First critical areas to protect are East Coast and Jurong Island
  • Plan to build a second pump house on the opposite end of Marina Barrage
  • Plus, a small polder at Pulau Tekong
  • Other possible solutions include more polders and dykes along the eastern coastline
  • and reclaiming a series of islands from Marina East to Changi

Next, PM Lee went on to address global threats to our little red dot. Namely, climate change.

Rising sea levels are a huge threat to our low-lying island. To combat this, new measures are in place to ensure new developments (buildings) must be built at least 4m above sea level.

To protect older structures and buildings that cannot be transported or lifted, more will be done to build better coastal defences.

It would take an estimated $100 billion and a 100 years to protect Singapore from rising sea levels.

Possible solutions include building more polders and dykes along the eastern coastline, and reclaiming islands from Marina East to Changi, creating a freshwater reservoir.

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6. US-China tensions — no intervention needed, for now

  • US-China tensions have resulted in an economic slowdown for Singapore
  • Current situation does not warrant immediate stimulus measures
  • But interventions will be made if the need arises

In his Mandarin speech, PM Lee also brought up the US-China tensions. He acknowledged that there has been an inevitable economic slowdown, but intervention is not needed yet.

Retrenchment and unemployment rates remain low. But if things continue to deteriorate, “appropriate interventions” will be made to protect Singapore workers.

If you’re confused whether we’re doing well or not, in recession or not, read this: Is Singapore Going Through a Recession? Wait, What’s a Recession?

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7. A major project to build the Greater Southern Waterfront — new housing, offices and another Universal Studios?

  • Develop area along the southern coastline
  • Keppel Club site to building 9,000 residential units, both HDB and private
  • There will be office spaces too
  • And recreation spots like a “another Universal Studios Singapore” and a Downtown South by NTUC

PM Lee first spoke about this in the 2013 rally, but back then, no concrete plans were announced. This time, he shared that they will redevelop some 30km of the southern coastline of Singapore, from Gardens by the Bay East to Pasir Panjang.

Pulau Brani will get a facelift to become a recreation spot, housing Downtown South by NTUC, and other new attractions “similar to Universal Studios on Sentosa”.

Keppel Club will go kaput — the lease expires in 2 years — and the site will be redeveloped to build 9,000 public and private housing units.

… I don’t know about you, but it seems a pretty prime piece of land to me. Our editor, Valerie, is already eyeing it as a post-MOP option.


What do you think? Share your thoughts on the National Day Rally 2019 with us!