Differentiating between Wealth Held by Households in Public Versus in Private Housing, and Measures to Sustain or Improve Upward Mobility Rates

Parliamentary Question by Assoc Prof Kenneth Goh:

To ask the Prime Minister and Minister for Finance (a) whether the Ministry differentiates between wealth held in owner-occupied public housing and privately-owned housing in measuring household wealth inequality, given the differences in liquidity and ease of deployment arising from resale conditions and use-of-proceeds rules; and (b) if so, how this is taken into account in assessing households’ economic resilience and in the computation of wealth Gini coefficient.

Parliamentary Question by Ms Mariam Jaafar:

To ask the Prime Minister and Minister for Finance in respect of the Ministry's Occasional Paper on income growth, inequality and social mobility trends which indicated that three in four children born into the bottom 20 percent of households in the late 1970s and 1980s moved to higher income tiers as adults, what measures are in place to sustain or improve these upward mobility rates for today’s and future cohorts.

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Parliamentary Reply by Senior Minister of State for Finance, Mr Jeffrey Siow:

Mr Speaker, sir. Over the past decade, real wages have risen across all income levels, with wage growth highest for lower-income workers. Income inequality has decreased. Social mobility between generations remains strong. These outcomes reflect sustained policies to uplift lower-income workers and to foster inclusive growth, supported by a progressive system of taxes and transfers.

Most countries face challenges in measuring wealth inequality accurately. Certain assets such as unlisted businesses, private equity and overseas assets, are inherently difficult to track and value. Financial confidentiality provisions further constrain data collection.

We have made our best effort by combining survey data from the Household Expenditure Survey with administrative records. The survey captures information on assets such as bank deposits and unlisted assets, including overseas assets, and liabilities such as household arrears and bank loans. We augment this with administrative data on properties, CPF accounts, Singapore Savings Bonds, shares and securities held in Central Depository accounts and the CPF Investment Scheme Special Account, life insurance policies, balances in the Post-Secondary Education Account and Edusave accounts, and HDB-administered loans. Property values are estimated based on their fair market value.

We have progressively improved the coverage and quality of wealth data captured in the Household Expenditure Survey. We will continue to study how data collection methods can be strengthened. Like many other advanced economies such as the UK, Japan and Germany, we rely primarily on survey-based approaches. We have no plans at this point to seek additional legislative or administrative powers to require more granular asset disclosures solely for inequality measurement. 

This is our first compilation of the wealth Gini coefficient, and we do not have a historical series. We, however, intend to track this measure over time. The next cycle of the Household Expenditure Survey is planned for 2028. And we will consider whether additional indicators, which other members have suggested, can be provided. 

Members asked for further breakdowns of wealth inequality – such as by asset type, housing type or age cohort. The Gini coefficient is measured at the household level and not at the individual level. Hence, we do not break it down by age cohorts. We do not compute Gini coefficients by asset type, as households can and do convert their wealth from one asset type to another. We also do not differentiate between public and private housing, or between owner-occupied and non-owner-occupied housing, in computing the wealth Gini as this is stock measure of net worth and not a measure of liquidity. We do not have sufficiently granular data at the moment to provide the breakdown between local and overseas holdings. 

Mr Giam asked about wealth concentration at the top.  The top 1% hold about 14% of total household wealth, while the top 5% holds about 33%. These levels are broadly comparable to advanced economies with similar wealth Gini coefficients. However, these estimates should be interpreted with caution, due to sample size limitations and potential under-reporting in survey responses at both ends of the distribution. 

Wealth inequality is higher than income inequality in all advanced economies, as wealth accumulates over the life cycle. In Singapore, a significant part of household wealth, especially among lower- and middle-income households, is held in owner-occupied housing and CPF savings. Our housing and CPF policies have enabled many Singaporeans to build their assets over time.  This broad-based asset ownership helps to moderate inequality while strengthening long-term security and social stability. 

Mr Yip and Mr Giam asked whether we have considered other forms of wealth taxes beyond property tax. Our approach is to tax wealth in ways that are less susceptible to cross-border movement and tax planning, while preserving competitiveness. And this is why we focus on less mobile assets like property and motor vehicles. These taxes are progressive, with higher-value assets taxed at higher rates. 

We are mindful of intergenerational balance. Younger households who are accumulating assets should not be unduly burdened. At the same time, higher-value property owners should contribute more. For asset-rich but income-poor seniors, we provide deferral mechanisms for property tax payments to ease cash-flow pressures.

We fully agree with Ms Mariam Jaafar on the need to sustain upward social mobility for current and future cohorts. Our strategy is to intervene early, provide support through life, and ensure wage progression.

We have expanded access to affordable and quality preschool education to give children from all backgrounds a good start. Our schools provide a strong foundation with more support for those from disadvantaged households. SkillsFuture provides continuing learning opportunities for adults, including enhanced support for mid-career workers. The Progressive Wage Model and Workfare raise earnings and strengthen career pathways for lower-wage workers. For families facing complex challenges, ComLink+ provides more intensive, coordinated support in partnership with community organisations. 

Overall, Singapore remains in a stronger position than many advanced economies. But we do not take this for granted. Tackling inequality and improving mobility requires sustained investment across generations. We will continue to review and update our fiscal measures to ensure they remain effective and sustainable. We remain committed to ensuring every Singaporean can start well, progress in life, and share in our nation’s success.