Measures to Enhance Income Mobility and Reduce Income Inequality

Parliamentary Question by Mr. Christopher de Souza:

To ask the Deputy Prime Minister and Minister for Finance what measures are being undertaken to enhance income mobility in addition to reducing income inequality.

Parliamentary Reply by Deputy Prime Minister and Minister for Finance, Mr Heng Swee Keat:

The Government is committed to strengthening social mobility in Singapore.  This is why our approach has not been to rely narrowly on redistribution to reduce inequality, but also to put in place a broad range of measures to maximise opportunities for all Singaporeans, and enable them to earn their own success.  

2. Our first priority is to ensure a strong, dynamic and resilient economy. Only when our firms are increasing productivity can workers find good jobs with sustained wage increases. We are therefore continuing to help our businesses restructure and succeed in new markets through innovation and enterprise. 

3. Beyond the economy, we are addressing social mobility holistically by intervening upstream.  This means investing heavily from the preschool years, enabling multiple pathways to success both in the schooling years and working life, and integrating and rejuvenating our neighbourhoods.

4. We are starting early to give every Singaporean the best possible start in life, regardless of family background, because the first few years of a child’s life are critical.  That is why we have made major enhancements to preschool subsidies, and are expanding the KidSTART programme to provide upstream and integrated support for children from low-income families. 

5. We will continue to invest in our education system, to enable every individual to pursue their diverse aspirations and realise their full potential.  We are broadening and enhancing our learning pathways through new Work-Study Programmes in our Polytechnics and ITE.  Polytechnic graduates can upgrade their skills and earn more through the SkillsFuture Work-Study Post-Diplomas, while ITE graduates will be able to upgrade beyond a Nitec over the course of their career.  At the same time, we have recently increased the quantum of bursaries for University and Polytechnic students from lower-income families. 

6. We have also embarked on SkillsFuture to build a culture of lifelong learning and skills mastery. Individuals and companies have stepped forward and training participation rates have increased in recent years. But there is still much more work to be done. We will continue to invest in SkillsFuture to help our workers prepare for the rapid transformations that are taking place across all industries.  

7. We are paying closer attention to lower-wage workers, and those who are at risk of being displaced.  This is why we have ramped up the Adapt and Grow initiative, which helps job-seekers acquire new skills and take on new jobs.  For lower-wage workers, we will continue to enhance their skills and productivity through various measures including the Workfare Income Supplement Scheme, and the Progressive Wage Model.   

8. Our neighbourhoods are a key pillar of social inclusion and mobility.  We have made sure that our public housing estates are not stratified or segregated, and built common spaces where residents from all walks of life interact and create shared experiences.  We are now stepping up our efforts for families in rental housing, and doing more to help all working Singaporeans own their own homes.  

9. Growth, mobility and inequality are key concerns for all advanced economies.  In Singapore, we have put in place a holistic set of measures to enable everyone to move up the ladder.  We have achieved broad-based income growth. Over the last five years from 2013 to 2018, real income growth averaged 3.3% per annum for our low-income households^[1] and 3.4% for our middle-income households.  We have also done better than many other countries in social mobility: 14% of those with parents who were in the lowest income quintile when they were growing up, managed to move up to the top quintile of income earners by their early 30s.     

10. The Government will continue to review and enhance its programmes to ensure that all Singaporeans, whatever their starting point, have the opportunity to build a better life for themselves and their families.

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^[1] Lowest 20% and middle 20% of households by income. Data refers to household income from work (including employer CPF contributions) among resident employed households. Source: DOS