Measures to Encourage Parents to Have More Children

Er Dr Lee Bee Wah asked the Minister for Social and Family Development in support of the Government's policy to encourage more parents to have more children (a) whether the Ministry has considered giving free childcare for Singaporean pre-school children; and (b) how much this will cost the Government if it is implemented.

We understand that childcare costs are a concern to many young parents. Our approach is for the Government to play a strong supporting role by defraying parts of the child-raising costs, including subsidising childcare.

Initiatives to help parents manage the costs of child-raising include Baby Bonus, tax benefits and housing, and medical grants. In particular, the Government recently enhanced the Child Development Account (CDA) by introducing the CDA First Step, which provides the first $3,000 of Government contributions, without parents having to save first. CDA funds can be used to pay for the education and healthcare needs of the child, including childcare fees.

The Early Childhood Development Agency also works to ensure childcare remains affordable for families. This is achieved in two ways.

First, centres under the Anchor Operator and Partner Operator schemes are subject to fee caps. Today, over 40% of Singaporean children enrolled in childcare are in these centres, which is a significant increase from about 20% in 2012.

Second, through basic and means-tested childcare subsidies, which were enhanced in 2013. This allows lower-income families to pay as little as $3 per month. Parents can also use money in their CDAs to pay for the balance of the fees.

Through these enhancements, we have significantly increased Government spending on early childhood. We spent about $600 million on pre-school related efforts last year, which is more than one-and-a-half times what we spent in 2012.

This approach keeps childcare affordable, while allowing parents to choose from a variety of options according to their preferences. Conversely, provision of free childcare may limit the range of childcare programmes available to parents and result in a higher burden to taxpayers. It may also have the unintended consequence of driving over-consumption and, hence, raising demand, so parents truly in need of childcare might find it difficult to secure a place.

We will continue to monitor and review our measures to ensure quality childcare remains accessible and affordable, as part of a range of measures to support the parenthood aspirations of Singaporeans.