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Public sector productivity can sustain Singapore’s economic growth

Anuradha Shukla | Oct. 30, 2012
Difficult reality as Accenture projects US$10B in additional costs for Singapore public services by 2025.

An improvement in the public sector productivity can sustain Singapore's economic growth but this aim could be difficult to reach as a new report by Accenture projects the Singaporean government to spend an additional US$10 billion to fund public services by 2025.

Findings of the report titled "Delivering Public Service for the Future: Navigating the Shifts," are based on the analyses and impacts of projected economic and demographic changes on the costs of delivering all public services, including all government spending in Singapore.

In Singapore, this cost is projected to be about US$72 billion, 12 percent of GDP, by 2025. These costs are primarily associated with an ageing population, aged 65 years or older, that is projected to increase by about 2.5 times between 2010 and 2025.

This population will account for 17 percent of total population by 2025, according to the report.

"In face of the challenges posed by the ageing population and rising expectation for public services, improving public sector productivity is imperative to drive and sustain Singapore's economic growth," said Teo Lay Lim, managing director, Accenture Singapore and ASEAN. "With the study, we aim to help lay the groundwork for this journey of historic demographic change especially in Singapore."

Increase in spending on healthcare

Singaporeans have one of the highest life expectancies in the world, and Accenture notes that government spending on healthcare increased from US$2.7 billion in 2008 to US$4.1 billion in 2011.

Singapore public sector efficiency would need to increase by 1.4 percent annually through 2025 to close the expected expenditure gap created due to an ageing population and an increasing demand on public services. 

Fifty-six percent of Singapore respondents are satisfied with the services they receive, and 70 percent of the citizens are confident that the government will be able to deliver public services that meet people's needs and expectations over the next five years.

Sixty-four percent of Singaporeans said it is important for government to understand better the priorities of citizens and communities and 38 percent said the government should make sure services are more tailored to the needs of people using them.

"Our research showed, that of all the countries we surveyed, Singaporeans were the most confident that the government will be able to deliver public services that meet people's needs," said Peter Goh, who leads Accenture's Health & Public Service business in ASEAN.


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