July 8, 2006
Income gap cushioned by wealth-sharing schemes


By Elgin Toh

DESPITE the widening income gap here, differences in the standard of living between Singaporeans who are well off and those who are not are cushioned by government assistance and wealth-sharing programmes, deputy labour chief Lim Swee Say said last night.

Speaking at a community event and referring to the 2005 General Household Survey, he said the Government has done so through healthcare, public housing, education, public transport and other programmes.

These have helped make a difference in the quality of life of Singaporeans, particularly those who are less well off.

Citing the General Household Survey released last Wednesday, Mr Lim acknowledged that the income gap was widening.

This was reflected in how the Gini coefficient - a statistical tool measuring income inequality - grew from 0.49 to 0.52 in the past five years.

'At 0.52, Singapore is probably one of the countries in the Asia-Pacific with the highest Gini coefficient. If you were to move along that line, it means Singapore should be one of the societies with the widest social divide,' he said.

But he added that the Gini coefficient 'measures only our income' and does not include government spending on social programmes.

'So, in other words, if you look at the total package in terms of the quality of life and standard of living in Singapore, our social divide is a lot smaller compared to other countries. It is not as bad as reflected in the Gini coefficient,' he said.

Mr Lim, who was speaking at a Northwest Community Development Council (CDC) appreciation dinner, added, however, that Singapore should continue to care for older workers and low-skilled workers, who face difficulties when looking for jobs.

'We must continue to create more job opportunities in our community, and, at the same time, we have to find ways to strengthen our social safety net, for example through the ComCare Fund,' he said, referring to the fund for social assistance programmes run by CDCs.

The household survey by the Department of Statistics was carried out last year. It found that while the incomes of most households here rose in the past five years, those in the bottom third of households saw earnings decline over the same period.