CLOSING INCOME GAP

CLOSING INCOME GAP

8.

Mr Seah Kian Peng asked the Minister for Community Development, Youth and Sports what is the current gap between the top five and bottom five percent of Singaporeans in terms of per capita income and what measures are the Ministry taking to close this gap.

Dr Vivian Balakrishnan: Singapore's Gini coefficient(2), which is a measure of the income gap, was 0.481 in 2008, lower than the 0.489 in 2007. The figure would fall to 0.462 after adjusting for Government benefits and taxes. It was 0.479 in 2007(3).

We help lower-income Singaporeans upgrade themselves through training and job redesign so that their wages can increase over time. Since 2006, low-wage workers have made some significant progress in their incomes as they took advantage of job opportunities. The wages of the lowest 20th percentile full-time employed residents increased from $1,200 a month in 2006 to $1,310 in 2008. Correspondingly, the number earning $1,200 or less has fallen from 360,000 in 2006 to below 300,000 in 2008.

Workers can tap on the Skills Programme for Upgrading and Resilience (SPUR). This $650 million programme provides enhanced financial support for Singaporeans to upgrade their skills so they can stay employed or seek re-employment. For those who are earning low wages, the Workfare Income Supplement (WIS) scheme helps to supplement the incomes of these workers. For work done in 2008, some 330,000 workers have received $390 million in Workfare benefits, including the Workfare Special Payment announced as part of this year’s Resilience Package.

Our social safety net caters to the neediest. Through ComCare, affected families are given necessary assistance while the main breadwinners seek employment. Those who are not able to work and have no family support would be placed on the Public Assistance scheme.

We also invest heavily in developmental opportunities for children from low-income families. This is key to helping the next generation break out of the poverty cycle. These children are eligible for MOE’s Financial Assistance to defray their school and miscellaneous fees, cost of textbooks and uniforms. ComCare helps the younger children through childcare and kindergarten subsidies. Today, low-income families with a monthly income of $1,500 or less pay only $10 a month for childcare and $5 for kindergarten. Those earning between $1,500 and $1,800 pay $20 for childcare and $10 for kindergarten a month.

We expect to spend $77 million on ComCare programmes in FY2009, 37% more than what we spent last year. As at end June 2009, the ComCare nationwide schemes were helping about 27,000 cases, an increase of 15% compared to the number of cases receiving assistance as at end December 2008. Since the inception of ComCare in 2005, we have helped over 85,600 cases.

We will continue to monitor the situation and review our schemes so as to ensure that all Singaporeans will have opportunities to do well individually and collectively.

(2) The Gini coefficient is a summary measure of inequality, and takes value between zero and one. The more unequal the income distribution, the larger the value of the Gini coefficient. A value of 0 represents absolute equality, and a value of 1 represents absolute inequality.

(3) By way of comparison, according to the UN Human Development Index, Singapore's Gini coefficient falls between that of the US and Hong Kong.

**

**