Wealth inequality (MOF)

According to the Credit Suisse Global Wealth Databook, the top 1% of Singapore’s wealthiest people hold 29% of the country’s wealth, and the top 10% hold 60%. Wealth inequality in Singapore fell slightly during the Global Financial Crisis in 2008, but since the economic recovery, it been showing an uptrend again.

Committee of Supply Debate, Ministry of Finance, 9 March 2015

Sir,

Much has been discussed in recent years about income inequality and the steps that have been taken to reduce it. What is less discussed, but no less troubling, is wealth inequality, which refers to the unequal distribution of assets, including land, property, stocks and inheritances.

Wealth inequality can increase income inequality over the long term. The wealthy can increase their income from not just high salaries and bonuses, but also from their assets, in the form of rent, dividends, interest, profits, capital gains or royalties.[1] Those with less wealth depend almost exclusively on income from their own labour.

According to the Credit Suisse Global Wealth Databook, the top 1% of Singapore’s wealthiest people hold 29% of the country’s wealth, and the top 10% hold 60%. Wealth inequality in Singapore fell slightly during the Global Financial Crisis in 2008, but since the economic recovery, it been showing an uptrend again.

Of course, complete equality of income and wealth are both unrealistic and undesirable. However, reputable studies have shown that in advanced economies, greater income inequality is associated with diminished social mobility and less equality of opportunity.[2]

Does the Government share my concern about wealth inequality in Singapore, and if so, what are its strategies and plans to narrow this gap?

How are statistics on wealth inequality being tracked by the Government? The Department of Statistics has said it will continue to monitor international developments in the compilation of wealth statistics, and review the feasibility of doing so in Singapore. Does MOF take the same approach, and if so, have there been any developments in compiling wealth statistics?

—–

[1] See Thomas Piketty, “Capital in the Twenty-First Century.”
[2] See speech by Janet Yellen (Chair, Board of Governors of the Federal Reserve System), “Perspectives on Inequality and Opportunity from the Survey of Consumer Finances,” 17 October 2014.

Leave a Reply

Your email address will not be published. Required fields are marked *