Income up 0.3%: Everyone got govt benefits?

by Leong Sze Hian

I refer to the Key Household Income Trends 2010 report released by the Department of Statistics, on 14 February.

Income increase only 0.3%

It states that “among resident households, median monthly income from work increased by 3.1 per cent from $4,850 in 2009 to $5,000 in 2010; in real terms, the increase was 0.3 per cent”.

After last year’s record 14.7 per cent GDP growth, this 0.3 per cent real increase is very small indeed.

From 2000 to 2010, the real increase per annum was only about 1.7 per cent.

Does this mean that about half of all households had a real increase of less than 1.7 per cent per annum from 2000 to 2010?

Lower-income households negative increase?

What was the real increase for the bottom 20 or 30 per cent of households? – Negative real increase?

Although the household flat-type which increased the most was HDB 1- and 2-room flats  { “Median monthly household income from work increased by 10 per cent (7.0 per cent in real terms) among employed households living in HDB 1- and 2-room flats}, the median household income for this group in 2010 was only $1,200.

This is a nominal increase of only about 0.4 per cent from $1,190 in 2008 to $1,200 in 2010. In real terms, its is a decrease of about minus two per cent.

Income down, HDB increase rental?

So, if your income is not increasing, and HDB changed its policy some time back to gradually increase the rental of HDB rental flats as tenants’ income exceed $800 and more than two years of staying in a rental flat, our HDB policies may be making the lives of these poorer Singaporeans even harder.

As the HDB recently announced that it would build another 7,500 rental flats to meet demand, in addtion to the 40,000 plus rental flats now, does it mean that the total number of households in 1- and 2-room flats in Singapore is growing?

With half of those living in such flats earning less than $1,200, how do they manage?

Survive on $354 a month?

The Average Monthly Household Income from Work Per Household Member Among Employed Households by Deciles”, for the 1st – 10th decile in 2010, was only $354.

This is a real increase of only about 0.5 per cent per annum, from 2008 ($340) to 2010 ($354).

How does a family survive on $354 per household member? In this connection, the Comcare benchmark for financial assistance is $450 per household member.

I estimate the total number of households in the 1st to the 10th decile to be about 100,000.

Income gap less due government benefits?

As to “The disparity in household income from work per household member among employed households increased marginally in 2010. The Gini coefficient, which is a summary measure of income inequality, increased slightly in 2010. In particular, including employer CPF contributions5, the Gini coefficient was 0.472 in 2010, compared to 0.471 in 2009. Adjusting in addition for government benefits and taxes, the Gini coefficient was 0.452 in 2010”, what this means is that the income gap has continued to widen.

Also, the ratio of average income of top 20% to lowest 20% employed households increased from 12.7 to 12.9, from 2009 to 2010.

Everyone got government benefits?

The report also mentioned that on average, the various government schemes added “$1,110 per household member to resident households in 2010”, I would like to ask the following questions:

How can “schemes relating to healthcare, such as subsidies for medical bills incurred at A&E, day surgery, hospitalisation episodes from 2002 onwards” and also “subsidies for medical bills incurred at specialist outpatient clinics and polyclinics, and Medifund disbursements” from 2006 onwards be counted as “government benefits and taxes” to reduce the Gini coefficient?

Do any countries in the world adopt such a computation?

How can the so called “80 per cent subsidy”when anyone is hopitalised in a Class C ward be counted as a “government benefits” to all residents in Singapore?

How can such public spending on healthcare be counted, when according to the Ministry of Health’s web site, Singapore’s public healthcare spending at about 1 per cent of GDP, is one of the lowest in the world?

How can “GST Credits” be counted – isn’t it for offsetting the GST increase?

How can “Workfare Income Supplement disbursements” be counted, when the bulk of it is to your CPF, which you cannot use now?

How can “rebates on utilities, rental and service and conservancy charges”, be counted, when the electricity tariff and S & CC keep going up over the years?

How can “Edusave Merit Bursary, Edusave Awards and Edusave Scholarships for Government or government aided schools”, be counted as a benefit to all residents?

How can “post-Secondary Education Accounts Top-up and government’s matching grant from 2008 onwards”, be counted when you can’t use the money now – only when your children go for tertiary studies?

You may have noticed a trend of more and more routine Government spending being counted as “benefits” for all residents, such as “Baby Bonus from 2001 onwards, Centre-based Infant and Childcare subsidies from 2002 onwards, and schemes relating to ComCare programmes from 2004 onwards”, etc.

How can “CPF Deferment Bonus from 2008 onwards, CPF Life Bonus and Voluntary Deferment Bonus from 2009 onwards” be counted, when these are top-ups to your CPF in exchange for your voluntary deferrment of your CPF withdrawal until age 65? It is money that you can only see use when you are 65, vide a monthly life annuity.

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