The Online Citizen

Cost of living – expats vs locals

March 06
08:38 2014
Picture from Yahoo

Picture from Yahoo

By Andrew Loh

Even as Singapore’s Deputy Prime Minister and Finance Minister was dismissing a report which ranked Singapore as the most expensive city in the world, the prices of Certificates of Entitlement (COEs) for vehicles were shooting up to their highest in months in some categories.

A COE is what one needs to purchase and own a car in Singapore.

The prices in Cat A, which is for cars above 1,600cc or 130bhp, increased by 2.7 per cent to a four-month high of $80,710.

The COE prices in Open Cat, which is for any vehicle type, climbed 3.8 per cent to $82,000. This is also its highest since last November.

The highest jump, however, was for motorcycle COEs. They rose a significant 14.3 per cent to register at S$4,001 from S$3,501 – its highest since 1995.

The rise in the prices of these certificates perhaps reflects the worries of Singaporeans generally.

So when the Economist Intelligence Unit (EIU) ranked Singapore as the most expensive city in the world this year, it resonated with many Singaporeans.

This may explain why the DPM found it necessary to issue an immediate response to it in Parliament.

The EIU survey examined 160 services and products in 140 cities around the world. The survey list include food items, entertainment, and clothes and is aimed at helping human resource departments in companies decide where to place their workers, and the costs associated with this.

But just as swiftly as the news of Singapore rising to pole position as the most expensive city made the rounds around the world, Mr Tharman sought to downplay the EIU findings which, he said, were “really aimed at measuring expatriates’ cost of living in different parts of the world.”

“They are basically aimed at comparing cost of living for expatriates in different cities or countries,” the Finance Minister said. “Hence, there are two things that make these surveys quite different from the factors that affect the cost of living for Singaporeans.”

One of the two things he referred to is the strength of the Singapore dollar.

“An important reason why we have become an expensive place for expatriates,” he explained, “is that the Singapore dollar has strengthened. Indeed, the EIU report points this out.”

However, Mr Tharman said that a stronger dollar benefits Singaporeans, as it “improves purchasing power for Singaporeans – in Singapore because imported goods become cheaper (and for us, food and everyday items are all largely imported).”

The other thing which he said made the survey different for locals and expats was the items used in the study – these include imported cheese, fillet mignon.

“And Burberry-type raincoats,” Mr Tharman said, “which are not very common in Singapore. It also includes the price of the four best seats in the theatre; and three-course dinners at high-end restaurants for four people.”

He said, “It is not that these surveys are wrong, or that they are misguided. But they are measuring something quite different from the cost of living for an ordinary local in different cities around the world.”

The EIU, in response to Mr Tharman’s explanation, said it acknowledged the points raised by the minister. However, it said that the basket of goods which it used for the survey included many everyday items as well.

“The survey basket ranges from a loaf of bread to a luxury car,” Jon Copestake, the editor of the EIU study said. “In fact, the highest-weighted category in our survey is that of groceries and everyday staples which include goods like fresh fruits and vegetables, meat, fish, rice, etc.”

The EIU survey results come on the back of Singapore being recently ranked as the world’s seventh most expensive city in the Expatistan’s Cost of Living index, and according to Pricewaterhouse Coopers, its property market is among the world’s top ten most expensive.

At the same time, Singapore has one of the biggest income inequality gaps in the world.

These survey results, as with the EIU one, are thus generally seen by Singaporeans as reflective of the situation they face.

A January survey by the Singapore Polytechnic of young Singaporeans found that the cost of living was a “major worry” for them. Among their concerns were whether Singapore would be an affordable place for them to live in, and whether they would be able to afford a house and a car.

But it is not just the young who worry about living costs.

Elderly Singaporeans were also recently reported to have been advised by some doctors to let their Medishield premiums lapse because these senior citizens could no longer afford to pay for these.

Medishield is an insurance scheme which helps to pay for large hospitalisation bills.

The premiums “have risen so high” for older Singaporeans that “it has become impossible for (them) to maintain their coverage”, said the Government Parliamentary Committee for Health in August last year.

It prompted the government to step in and introduce the Pioneer Generation Package (PGP) last week. The PGP is basically to help Singaporeans 65-and above pay their Medishield premiums and to receive yearly Medisave top-ups, among other things.

But even as the elderly struggle, on the other end of the spectrum Singapore was named the wealthiest country in the world by Knight Frank in 2012, it also has the most concentration of millionaires in the world, and is ranked 6th for the number of billionaires.

And on the same day the EIU report was making the rounds, a Knight Frank report said Singapore will soon overtake Tokyo as the Asian city with the most ultra-high-net-worth – US$30 million and above – individuals within a decade.

That number is expected to be almost 5,000 individuals by 2023 – just one place behind London globally.

But increasingly, Singaporeans are questioning what all this mean for them on a daily basis as they have to put up with a more crowded city, keener competition for jobs, and an ever-rising cost of living where even affording basic daily necessities has become a challenge.

A BBC report last week on the poor in Singapore said “it comes as no surprise that the less well-off would struggle to pay for daily necessities.”

“There is no minimum wage or poverty line set and no welfare provision along the lines of many developed Western economies,” the BBC said.

But Mr Tharman said that low- and middle-income Singaporeans “have incomes that grow faster than the cost of living.”

“That is what is important and what we have fortunately been able to achieve,” he said in Parliament.

“Indeed, for the low-income households, if you exclude from the CPI index the imputed rentals for those who own their homes (they do not actually have to pay rentals), then the increase in real incomes of the 20th percentile household was 19% over the last five years.”

 
  • Xtrocious

    I think you meant Cat B COE – that’s for cars above 1600cc and 130BHP

  • Joe Tan

    Farking Tharman. Stop treating us like idiot children. I’m a local and I can see the daily expenses of living skyrocketing. Fark u Tharman

    • Day Bit

      skyrocketing?! wow really? i guess a few cents increment is skyrocketing!!

      • nelsonmandala

        ello fren..where got a FEW cents increment? befor GST was implemented a bowl of sweet(tau suan borborcha cha) was aroun 70 cents
        when GST cam in..the price rocketed to a roun figure of $1 and worst of all
        these sweet hawkers dont even pay GST..and if you had visited the hawkers lately, price increased in an average of a near 50cents/meal

      • jane

        you must be living in your own delusional world.

        • Francischuangli Chuang

          Bowl of beef noodles cost S$5.50@Orchard ion. It contained a pinch of noodle, few little slice of beef & flavored with few spoonful of starchy gravy.!
          Just wonder how much is the material cost & who keep the balance ?
          If this is not Sky-rocketing, what else is it ?

          • Nitsuj

            5.50 only? Please come to United Square. Beef Noodle, $6.00.

  • SiaOLiaO

    I think this article speaks the truth except for the last 3 lines. Rubbish.

  • Puzzled

    I thot Singaporeans and Foreigners all pay the same COE?

    • Francischuangli Chuang

      YES, but if U cannot afford with par to the RICH FT, please go on public.

  • Andrew Leung

    Mr Tharman must publish an annual report for all the cost of living items and costs of doing business and give the estimates and projections until 2030. We must manage all the costs and productivity concerns of citizens and worldwide investors.

  • lpc1998

    COE is the most appropriate and effective traffic congestion mechanism in land scarce
    Singapore as it limits on the number of vehicles on the roads to what the roads could accommodate for a workable traffic condition. It is in nobody’s interest for Singapore to become a gigantic car park. Those who live in Singapore should know this.

    • RBD

      Yes, but what/who caused this congestion in the first place? In the same breath that you excused that land is scarce, but from the way we are aiming for 6.9 mil and beyond, it would not seem so! High COE and traffic congestion is a resultant effect of over-population, and should not seen in isolation or as a given and inevitable.

      • lpc1998

        High COE and traffic congestion is caused by vehicle over-population, not necessarily people over-population. You seem to want Singapore’s population to be capped at a certain level. What is this level you have in mind?

        • Francischuangli Chuang

          Our population had grow faster the natural growing rate all due to messive importation of foreigners and not natural increase of birth rate by the local.

  • 80twenty

    So the PAP is saying, DO NOT aspire to eat cheese OR BUY a Burberry as these are NOT MEANT for you.
    EIU said to SG, there are 100s of other items that are ‘prohibitive too’ – not only cheese and Burberry.
    So who is ONLY telling HALF TRUTHS of HARD TRUTHS?

    • Francischuangli Chuang

      Yeah, PAP in the other words is telling us SINGAPOREAN should go for the cheaper cut such as FT unwanted Fish head, bones, & belly and leave the fellets to the Rich & the WHITY.

  • Misleading

    The research also included daily necc like bread, milk and meat on a higher weightage. Don’t locals consumes them too ?

    • Day Bit

      There is something called premium items and non premium items. Fairprice vs Jasons. The price difference will be tremendous. Oh and Why dont you talk about clothing. Does most local shop for high end clothings along orchard road?

      • andy

        Technically, for bread, milk, and meat — there won’t be THAT much of a difference between Fairprice and Jasons. Try harder.

      • Francischuangli Chuang

        WITHIN FAIRPRICE STORE, home brand flour cost more then Prime brand flour. Price in Fairprice may not be necessary FAIR. HEHEHE..

    • Francischuangli Chuang

      No. U local poor are not to deserve the better cut. It’s for the HIGH-END RICH. But if U really wanted it, please don’t complaint for your FREEDOM OF CHOICE.. Hehehe………

  • nelsonmandala

    many xpartraits r drivin 1 car shared with the family, usually the wife would drive the hubby to shenton way and then return to fetch kids to school and in the evennin would do the same routine to pickup the hubby and mind u, this xpartaits earned no less than $20k monthly

  • Worrying

    I remembered Goh Chong Tong, when he was a PM, told Singaporeans during his National Day Rally that if we can’t afford branded bread, go for cheap bread. Today, such messages still applies and became more obvious. It goes to show Singaporeans have not progressed under the PAP’s leadership since GCT’s era. However, one thing is certain, the ministers salaries have grown beyond everyone’s imginations while the workers’ cost are kept low. We all breath different air even though we stayed in the same country. Now, this is something new from the minister’s mouth that that expats who reside in Singapore felt the cost of living is high while Singaporeans felt it is low? I can’t justify such excuses.

  • Andrew Leung

    NTUC must compile 2 sets of Cost of Living Report for both Expats and Locals lifestyle. NTUC must also publish the Progressive Wage and Productivity Magazine for Employees and Businesses.

  • s

    there’s 2 singapore.

    $ingapore and Sing-a-poor.

  • Francischuangli Chuang

    So according to survey, our gap of rich vs local poor divides is getting wider. Our consumer cost will have to consider about the supply for the rich from the poor local just as Mr ATOM CASEY expression. Rich will own car for personal transport ride & local poor will go satine in MRT or buses. In the hypermarkets, RICH will buy Salmon fellet & the head, bone, belly cut cheaper unwanted cut for the poor local. Etc etc…
    Is this what the kind of life the local SINGAPOREAN should endure which is designed by our WORLD CLASS GOVERNMENT?

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