The Baby Bonus Scheme, which was introduced on 1 April 2001, supports parents' decision to have more children by helping to lighten the financial costs of raising children. The Baby Bonus Scheme consists of two components - a cash gift and a Child Development Account. It is hoped that through financial incentives, the birth rate can be boosted, allievating Singapore from the eventuality of an ageing population.
The Baby Bonus Scheme
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Having a sister who turned 3 this year, this brought me up close and personal with the Baby Bonus Scheme, at work at a time when I was beginning to figure out the various mechanisms that run the country and forming opinions of my own.
Firstly, the sudden addition of a family inevitably leads to a jumbling up of family finances in the first year of so. Hence, one good thing I find about Baby Bonus payouts is that it provides a cushioning for the initial surge in household expenditures. Thus, there is a transition taking place here and households could adapt more readily to include these expenditures into the balancing of the family budget. Moreover, in a country where many things are taken at face value, the allure of financial incentives serves as a good source of motivation for couples to start a family, if only to lay their hands on the money pot.
However, this scheme, introduced more than a decade ago, is increasingly becoming obsolete. Firstly, given the ever rising costs of living in Singapore and the stagnancy of Baby Bonus payouts, the attractiveness of the financial incentive inevitably dwindles with time as couples figure that it does not sufficiently cushion the sudden addition of a child into the family. Moreover, in a digitally connected age, projections can easily be made and data could be incorporated into family planning. Hence, the sole use of financial incentives will not really work should it not be coupled with other outreach methods.
Overall, a good initiative with sound logic. However, the government should do more to ensure its relevancy with modern times.