The city-state, facing the prospect of a graying and shrinking population, extended maternity leave from two to three months and offered an array of cash and other incentives to encourage couples to have up to four children.

"Our declining birth rate is an issue of long-term national significance. Efforts to promote parenthood therefore warrant a substantial investment by the government," said Trade Minister Lim Hng Kiang, who heads a committee that drew up the measures.

Lim said that while the government did not want to intrude into couples' personal lives, the state had a role to play in making sure the conditions were right for raising a bigger family.

"We believe that having children is a very personal decision. People must want to have children because they love children and they want to build a family life for themselves," Lim told a news conference.

The S$$300 million in new annual expenses will be on top of existing incentives worth 500 million dollars a year aimed at encouraging procreation.

Singapore's low birth rate has become an urgent national concern after the fertility rate hit an all-time low of 1.26 children per woman in 2003, as people delayed marriage or had fewer children due to career pressures and the high cost of living.

A highly successful government campaign in the 1980s urging couples to "stop at two" children also contributed to the declining birth rates.

Only 36,000 babies were born last year, well below the 50,000 needed to replenish the population of 3.4 million naturally and to provide enough manpower for long-term economic, defense and other needs.

Failure to produce enough babies will also mean a higher proportion of elderly citizens in the population in the long term, resulting in heavy social welfare costs for the state.

Initial reactions showed the government faces an uphill battle.

Echoing popular sentiment, a newly married office worker who asked not to be named said the measures would not encourage him and his wife to have more than two children, citing the high cost of raising children.

Chan Chian Seng, a regional marketing manager with two children, welcomed the measures as a "carefully thought out plan" but said it would not influence his and his wife's decision to have another child.

"If I ever decide to have a third kid, it will be independent of the incentives. The incentives are secondary," he told AFP, stressing that having more children is a "lifelong commitment."

Rather than outright cash grants, the government put emphasis this time on making it easier for couples to raise more children while pursuing careers.

From August 1, couples with a child aged below 12 will pay a government levy of only $250 a month if they employ a foreign maid, down from $345.

A law will come into effect on October 1 requiring companies to give new mothers three months' paid maternity leave, up from two months.

A "baby bonus" cash scheme first announced in 2000 will be extended to cover four children, up from two.

In addition to parenthood tax rebates, each working parent with children aged below seven will be entitled to two extra days per year of leave, while an infant care subsidy of $400 each will be given for up to four children.

Private firms can draw from a $10 million government fund to partly defray the cost of measures to let employees balance family life and work, such as building a room for breastfeeding mothers.

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