Speaking in parliament today on income inequality and social division, Education Minister Ong Ye Kung downplayed social inequality in Singapore, saying that “as result of income growth across the board, including the lower income” Singaporeans have been able to enjoy changing lifestyles.
“Birthday and festive celebrations in restaurants, living in bigger HDB flats and executive condominiums, family vacations overseas – these are not enjoyed by an exclusive few, but a broad middle.”
Mr Ong also reported that when it comes to the income gap, Singapore is doing better than other developed nations.
He said that median income of households in Singapore has grown 3.4 percent between 2006 and 2016.
Across this same time period, households in countries such as the United States, Japan, Britain, Denmark and Finland saw stagnating or close to zero growth.
“In Singapore, our median income is still rising. Low-and middle-income families continue to experience real income growth and social mobility. Singaporeans have been enjoying a rising standard of living and are motivated to do well. This is both a result of our culture, who we are, as well as our public policies.”
Mr Ong also reported that data shows a Singapore household in the top decile earns on average 5.8 times as much as a household in the bottom decile – higher than South Korea, Britain and Finland, which has a ratio of about 3.
However, he added that the ratio is not “out of kilter” compared with other major cities.
Mr Ong said government policies such as a progressive tax system have helped to moderate income inequality.
He reported that the top 10 percent of income earners contribute about 80 percent of personal income tax revenue, and this tax revenue is then redistributed to lower-income Singaporeans.
Mr Ong said that families in the bottom 20th percentile in Singapore receive about S$4 in benefits for every dollar of tax that they pay, while middle-income families received S$2 of benefits for every tax dollar paid.
This, he said is a higher than the S$1.30-S$1.40 that middle-income households received for every tax dollar in Britain, the United State s and Finland.
Singapore’s Gini coefficient – which measures income inequality from zero to one, with zero being most equal – is currently about 0.36.
This is higher than the United States at 0.39 and similar to Britain, though lower than in other European countries and Japan, which have comprehensive welfare systems.
Mr Ong said it could be more challenging for many middle income families to do better, given the high base that society is at.
But, he said that Singaporeans who are hardworking by nature can continue to move up in the system.
He added that a better life should also not be defined purely in economic and material terms, but from a more holistic perspective: a more pleasant and greener environment, a more cohesive and caring society, and a greater sense of Singaporean pride.
However, Mr Ong said that the government has made tackling inequality a national priority, seeing that social division is threatening cohesiveness.
He said that a lot more needs to be done to develop more pathways and opportunities in education, and to change people’s mindsets about academic qualifications.
Mr Ong said that the government is willing to explore fresh ideas and try out interesting and promising solutions, but this doesn’t mean making major changes to current initiatives.