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SINGAPORE: Wealth inequality is challenging to measure accurately due to difficulties in obtaining comprehensive wealth data, which comes in various forms that are often hard to value, said Second Minister for Finance, Mr Chee Hong Tat.

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He noted that financial wealth is highly mobile across borders, and bank deposit data in Singapore is protected by the Banking Act.

“Many countries and international organisations face similar data challenges in measuring wealth inequality accurately. ”

Mr Chee also defended that international studies, such as UBS’ Global Wealth Report, rely on assumptions that may not fully capture Singapore’s wealth inequality due to differences in methodology and data limitations.

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Mr Chee was responding to Parliamentary question filed by Mr Yip Hon Weng, Member of Parliament for Yio Chu Kang SMC,  who inquired the Government on its actions to address wealth inequality.

His inquiry came in light of a July report highlighting that while Singapore’s average wealth has risen, so has wealth inequality.

Mr Yip specifically asked the Prime Minister and the Minister for Finance what additional measures the Government is taking beyond existing handouts and Central Provident Fund (CPF) top-ups.

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He also questioned whether there is a need to enhance the Progressive Wage Model (PWM) to ensure that salaries for lower- and middle-income workers rise more rapidly, potentially narrowing the wealth gap.

Mr Chee in a written reply on 14 October 2024 emphasised that the Government is working to improve data collection on both income and wealth to better assess inequality.

On the measures being implemented, Mr Chee highlighted several key initiatives aimed at addressing wealth inequality. He pointed to the CPF and the Housing and Development Board (HDB) home ownership scheme, both of which enable Singaporeans to accumulate substantial assets over their lifetimes.

The Government provides significant housing grants of up to S$120,000 for lower-income Singaporeans to assist with home ownership.

These grants, announced at the National Day Rally 2024, are designed to make home ownership more accessible, complementing the discounted prices of new flats.

Mr Chee further elaborated on the progressive nature of Singapore’s tax system. Wealth taxes, including stamp duties, property taxes, and the Additional Registration Fee for motor vehicles, have been made more progressive over time.

Recent Budgets have introduced higher marginal stamp duty rates on high-value properties, and increased property tax rates for non-owner-occupied residential properties. The Government’s transfer schemes, which are means-tested, also factor in wealth proxies such as home ownership and property value.

In the realm of education, Mr Chee underscored the Government’s commitment to providing equitable opportunities for all Singaporeans. The education system, which is heavily subsidised, offers multiple pathways to success, regardless of socio-economic background.

On average, the Government invests more than S$250,000 per child from pre-school to post-secondary education. This investment prepares students for their careers and supports their long-term wealth accumulation.

For lower-wage workers, Mr Chee cited the success of the Progressive Wage Model (PWM) in driving wage growth. Between 2013 and 2023, real wages for workers at the 20th percentile grew by 30%, outpacing the median worker’s 22% increase.

The PWM, which links wage increments to skill and productivity gains, has been expanded to sectors such as food services and waste management. The Government has also raised the Local Qualifying Salary to S$1,600 and enhanced the Workfare Income Supplement (WIS) scheme to provide further financial support.

To address the long-term earning potential of young workers, the Government recently introduced the ITE Progression Award. This initiative provides Institute of Technical Education (ITE) graduates with financial incentives to upskill to diploma levels, offering S$5,000 in their Post-Secondary Education Accounts and a S$10,000 CPF top-up upon diploma completion.

The goal is to boost graduates’ starting salaries and future earning potential, while supporting wealth accumulation through home ownership or retirement savings.

“The Government will continue to explore ways to tackle wealth inequality, including by keeping our social support measures progressive and targeted at lower and middle-income households,” Mr Chee said.

The Global Wealth Report 2024 by UBS, published in July, revealed that the number of millionaires in Singapore rose to 333,204 in 2023, a 0.4% increase from 332,000 in 2022.

Total household wealth in Singapore also grew by 5.6% in 2023, reaching over US$2 trillion, compared to the 4.2% global increase in household wealth, following a 3% contraction the previous year.



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