Connect with us

Economy

MTI disputes Economist’s costliest city ranking, questioning its accuracy in reflecting Singaporean cost of living

A recent Economist survey ranked Zurich and Singapore as the world’s costliest cities, surpassing New York.

However, Singapore’s Ministry of Trade and Industry (MTI) contested the survey’s relevance, citing potential inaccuracies in reflecting the local cost of living.

This is not the first time the government contested claims on the high cost of living in Singapore. In September, it challenged the findings from LKYSPP on minimum household income requirements, arguing that the study included higher-income participants and might not accurately mirror basic necessities.

Published

on

SINGAPORE: Recently, a survey published by The Economist magazine indicated that Zurich and Singapore are the most expensive cities in the world ahead of New York amid the ever-rising cost of living.

In response, the Ministry of Trade and Industry (MTI) of Singapore defended that the survey might not accurately depict the cost of living for Singaporeans.

On Thursday (30 Nov), a spokesperson for the MTI addressed the findings of the Worldwide Cost of Living survey published by the Economist Intelligence Unit (EIU), as reported by Singaporean Chinese media outlet 8 World News.

MTI asserted that the EIU’s survey aims to assist human resource and finance managers worldwide in calculating living costs, providing allowances for expatriates and business travelers, and formulating compensation plans.

The spokesperson emphasized that the consumption basket used in the survey does not align with the typical spending patterns of Singaporeans.

For instance, the basket includes luxury raincoats and foreign newspapers, which are not typically purchased by Singaporean households.

Furthermore, the survey converts the prices of goods and services in the surveyed cities into US dollars to facilitate comparisons between cities, said MTI.

“Our country’s strong exchange rate places us high in the rankings compared to other cities, but the strengthened currency does not raise the cost of living for Singaporeans earning income in Singapore dollars.”

“Conversely, a stronger Singapore dollar helps to curb imported inflation in Singapore by reducing import prices, subsequently lowering consumer prices.”

The MTI spokesperson emphasized that the Singapore government has taken additional measures to support its citizens to alleviate the impact of rising prices.

For example, in the 2023 fiscal budget, the size of the “Assurance Package” was increased from S$6.6 billion to S$9.6 billion.

MTI said In September of this year, the government also announced an additional S$1.1 billion in assistance packages to provide more aid to Singaporean families and further support low- and middle-income households.

Additionally, this package includes S$800 in measures beyond the budget, thereby raising the total amount of the Assurance Package to over 10 billion dollars.

“In summary, the assistance provided this year will fully offset the increased expenditures due to inflation and the increase in consumption tax for low-income families and substantially offset the expenditure growth for middle-income families.”

The MTI spokesperson emphasized that the Singapore government will continue to closely monitor the situation and provide support to its citizens to navigate through these challenging times.

MOM’s latest report highlights impact of high inflation on Singaporeans’ real incomes amid MTI’s dispute with EIU survey

Despite MTI’s dismissal of the EIU’s survey findings, a recent report from the Ministry of Manpower (MOM) revealed that in 2023, high inflation significantly affected the purchasing power of Singaporean residents.

This led to a 3% decline in real incomes for workers at the 20th percentile compared to the previous year. Median wage earners also saw a decline of 2.3% in their real incomes despite an increase in nominal wages.

The country also witnessed a decline in its employment rate among residents aged 15 and above, dropping from the previous year’s historic high of 67.5% in what was described as an “exceptionally tight” labour market to 66.2%, according to MOM.

Despite this decrease, MOM said the labour market in 2023 remained relatively tight.

SG Govt previously challenged “Minimum Income Standard 2023” report’s representation of basic needs

This is not the first time the government contested claims on the high cost of living in Singapore.

In September, Lee Kuan Yew School of Public Policy (LKYSPP) published a report, “Minimum Income Standard 2023: Household Budgets in a Time of Rising Costs,” unveiled figures detailing the necessary income households required to maintain a basic standard of living, using the Minimum Income Standard (MIS) method.

The report detailed that:

  • The “reasonable starting point” for a living wage in Singapore was S$2,906 a month.
  • A single parent with a child aged two to six required S$3,218 per month.
  • Partnered parents with two children, one aged between seven and 12 and the other between 13 and 18, required S$6,426 a month.
  • A single elderly individual required S$1,421 a month.
  • Budgets for both single and partnered parent households averaged around S$1,600 per member. Given recent price inflation, these figures have risen by up to 5% in the current report.

The 2023 MIS report also proposed three significant income reforms: introducing a universal wage floor, revising the Central Provident Fund (CPF) model to better serve the elderly, and pegging assistance amounts to current inflation rates.

Several observations were made regarding wage work feasibility during specific life stages and the importance of public initiatives like cash transfers and retirement income policies. Within CPF, modest increases in retirement sums reportedly made a minimal impact on retirement income adequacy.

However, the Singaporean government, in a statement, contested the findings by suggesting that they “might not accurately reflect basic needs”. Instead, the findings should be seen as “what individuals would like to have.”

The joint statement also highlighted that the report factored in luxury items such as jewellery, perfumes, and overseas holidays when estimating minimum income standards.

Because the study’s focus groups included higher-income participants, its conclusions might not accurately mirror basic necessities.

The ministries expressed concern that the report might exaggerate minimum income while downplaying government support, particularly for lower-income households. However, they acknowledged the report provides valuable insights into Singaporean aspirations.

The ministries, while supporting the intent behind the reforms, expressed reservations about the universal wage floor, citing potential job loss risks, especially if positions could be automated.

Efforts to expand the Progressive Wage Model (PWM) were highlighted, indicating future wage increases for sectors like retail and cleaning.

The ministries acknowledged the existing CPF system’s limitations, especially for lower-income workers. Initiatives like the Majulah Package and Silver Support and Workfare were cited as ways to address these gaps.

On 7 Nov, Workers’ Party tabled motion advocating structural reforms amid cost-of-living concerns, PAP amends WP’s motion

On 7 November, Singapore’s Workers’ Party presented a motion to discuss measures addressing prevalent pressures.

They advocated structural changes, urging the government to reduce living expenses for Singaporeans and their families. This highlighted the urgent need for action.

However, the ruling party PAP MP Liang Eng Hwa had proposed modifications to the WP’s motion.

The amended motion read: ” that the House acknowledges the cost of living as a global concern, and call on the Government to continue pursuing policies that together lower cost-of-living pressures on Singaporeans and their families, without undermining fiscal sustainability and burdening future generations of Singaporeans.”

Workers’ Party chief Pritam Singh strongly opposed the amendment, stating it diminishes the government’s responsibility in addressing citizens’ burdens. He emphasized the party’s proposed system changes as more effective than current policies.

“We disagree, indeed we have proposed specific structure changes to the system we believe will work better than current policies.”

“The Workers’ Party MPs have made concrete proposals in several areas. We urge the Government to conduct a comprehensive review of its policies to better support Singaporeans and their families during this Cost of Living Crisis,” he added.

Despite the efforts of the Workers’ Party, the motion was eventually amended with the approval of the PAP-majority Parliament.

All eight Workers’ Party MPs, along with two NCMPs from the Progress Singapore Party, recorded their dissent against the amendment presented by the PAP MP.

Share this post via:
Continue Reading
19 Comments
Subscribe
Notify of
19 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments

reduce fuel and electricity prices first, then talk lah. they think internationale are dumber than us sinkie sheeple?

Another mouth piece of Pappy in play to help the regime avoid being embarrassed by those not too good report on SG’s economic disaster.The sky high COL can only be attributable to the both domestic and mass immigration policies of Pappy.Remember “more billionaires will be welcomed as this will help create jobs for SGs and”what’s wrong with collecting more money “These policy directives have indeed help SG achieve second position as the world’s most expensive city period.Not to forget mass immigration has infact changed Singapore’s national identity.Our national identities are no longer the same as in the 80’s /90’s.So sad… Read more »

BTW, who believes MOM’s low employment numbers: 1) those undergoing any sort of training, conversion programs, etc. is considered “Employed”. 2) those working 3 days or more a week is considered “Employed”. 3) those in long term unemployment (more than 6 months) are taken off the “Unemployed” percentage. (Frankly, I dun know where they are placed in.) 4) those Underemployed is considered “Employed”, e.g. pilot now working as food delivery. So an uncle or auntie selling tissues everyday a week, variable income that may not even cover daily expenses, is considered “Employed” in MTI/MOM calculations. Whose surveying should be in… Read more »

Dear MTI

I cross the border, and can a Ghee thosai fairly large and. kopi for 5 ringgit and 50 sen- Works out to to SGD $1.60 . If you can beat that price for a thosai in Singapore, I shall concur. with You the Economist is wrong, till tham just enjoy X’mas bonus and avoid any comments

Pay themselves million$ salary not to solve SG problems for Singaporeans but to give excuses upon excuses for their failures and incompetency.

The PAP Administration has always defended it’s reputation – previously sue the Wall St Journal, Far E Econ Review, and others – and sue those whom it deemed destroy it’s credibility.

Why are we waiting to see MTI, PAP Administration NOT INITIATING legal action – OR SO IT SEEMS PAP go after weaklings and those it can be assured of victory offered by SG courts?

The MTI behaves like a CLOWN for the PAP Administration to show the world how good is it’s and PAP’s acting 🎭.

Goodness. They still entitled bonuses from the PAP when money is from the people.

What a good laugh, the best of laughs.

The MTI funded by Sheegaporeans taxes to exist and serve Sheegaporeans IS throwing Sheegapreans under bus, WHEN IT’S SHOULD be throwing the Idiotic Buaya PAP Administration under the bus.

The MTI IN REACTIVE MODE when the 1st Strike draws blood, and when the 1st strike from EIU strike at the Heart of MTI when it should have BEEN proactive, SINCE it SERVES the SG population rather than PAP Politics, WHY IT HAS NOT CHOSEN to be WISE to be the First to SOOTH citizens when 1st Signs of Unhappiness of SKY HIGH COL caused by the PAP? Which MEANS the MTI I HYPOCRITICAL to rebut EIU. 2ndly SG is 9 times SURVEYED as Top Most Expensive. Did MTI explain PAP Administration assisted those SAME measures 9 Times. Very CLEARLY… Read more »

Again, the standards/competency of the current PM/Ministers are appalling. They think calling Flooding as Ponding will mitigate ROOT causes. If a workplace has lots of WSH hazards leading to constant injuries, do the employer simply dish out more and more first aid when injuries happen? At least Ah Goh was an economist; the current one is a useless Clown.

Singapore was the costliest city in the world before the recent bout of inflation. Why would that change after inflation? Does inflation somehow make costs go down? What sort of economic theory does the Singapore’s Ministry of Trade and Industry subscribe to? The ones used by “leading” economies such as Venezuela, Zimbabwe and Sri Lanka? Is the Economist’s report accurate in reflecting the Singaporean cost of living? Yes. The price a small loaf white bread is now $2.50. Before the pandemic it was $2.20. That is a 13% increase in three years. Many stalls in hawker centres have raised the… Read more »

Last edited 2 months ago by Blankslate

Who to trust? An international organisation whose truthfulness is vouched for by countless of entities who rely on, and importantly they pay for accurate discourses and information when huge stakes are in the chopping block.

MTI? Who?

DENYING THE TRUTH DOESN’T CHANGE THE FACTS!

Keep denying sitting on your pedestals. We on the ground are living it daily. Anybody trust statements made by govt. agencies?

I thought they had a very powerful weapon to combat the fake news? POOOFMA !!!
they claimed it’s far-reaching + binding.

why suddenly POOOFMA becum impotent???
why? Why? Why?

Just because, … it’s a survey with stats that paints SillyPore in a very expensive light, which is neither attractive or positive !!! Truth hurts and this is only supported by the “cost of living” crisis that’s faced by every SillyPorean, … bar those who’re in the super~rich bracket and part or of the government itself, whom are rarely affected. Involving parts of the government to counter the findings, with mere words and artistic accounting analogies, … will not alter what’s being genuinely and physically felt by the people on the island, that are greatly impacted by this “crisis” !!!,… Read more »

Just like what Rights to claim over the colours just because they use it as way to distinguish their Empires. Then if I disagree with any colours overlords, is it I cannot wear that colours forever … Crappy nonsensical shit!

I am NOT surprise SG is One of the Costliest Place to live in. Dun forget, politically displaced persons which is not on the list are left outside the benchmark until they choose one of the Overlords. No?!? Who wants to be overlord by Rich who cares only about their empires then use nationalism and so on to rope them into their empire or structure like this to validate their Overlordship?!?

Trending

Discover more from Gutzy Asia

Subscribe now to keep reading and get access to the full archive.

Continue Reading