COS 2022: Clarifications on Poverty Line, Financial Assistance, and Inter-generational Social Mobility

MP Leon Perera

Mr Leon Perera: Thank you, Mr Chairman, Sir. Just three clarifications for Minister Masagos. I will try and keep it short.

Firstly, would the Ministry consider the proposal contained in my Budget speech to set a poverty line and measure the number of families, particularly, the number of children, who fall below this line every year so that we can measure how we are making an impact on the issue of poverty and transitioning people out of poverty? I note that some other countries do publish this data.

Secondly, on the quantum of financial assistance. How often is this reviewed? When will the next review be and do these reviews take into consideration new research such as the study by Prof Teo You Yenn and Dr Ng Kok Hoe that I referred to?

Lastly, a narrow clarification. The Minister referred to our inter-generational social mobility being better than North America and Europe, if I heard him correctly. Could he reference what is the study that demonstrates that? Because I am not aware of that.

Mr Masagos Zulkifli B M M: I will try to answer that in three minutes.

Firstly, the data that talks about social mobility. This came from a study. The source is Chetty et al, 2014, and authors in US, UK, Denmark; and our own estimates updated by the authors using administrative data. The US is about 7.5% for the share of individuals who reach the top income quintile among those born to the bottom quintile. So, 7.5% and that is North America. For the UK, it is about 9%; Europe, 11%. In Singapore, it is maintained about 14%, especially for those that we have estimated for the 1985 to 1989 cohorts. This is published in, as I mentioned, by Chetty et al, US, UK, Denmark, Canada authors; the authors are from these countries.

For the other issue on the publication by the academicians, particularly around what you call minimum income standards, this was responded to by MOF in October, giving its views about the minimum income standards. This was a study started in United Kingdom in 2006. So, it is a relatively new approach in determining what are the benchmarks and standards to look at in alleviating poverty.

For this particular standard, the idea is to determine what incomes different household types require to reach a socially acceptable living standard; a socially acceptable living standard. It is nothing to do with determining what low-income families should get.

As such, even the Singapore study reflects the processes and outcomes expected from the study by the UK condition and do not necessarily reflect the needs of the low-income households.

For example, the call for $1,600 monthly income for a single or partnered household include private enrichment classes, jewellery, perfume and therefore, in no way reflects what should be at least the basic necessity that we should meet for needy income households.

But nonetheless, I will respect that this is an approach, a particular academic approach and like the UK exercise, it should be seen as a reflection of what society aspires everyone to have for them, like what they want to have at least for themselves. Nonetheless, there are many other academic approaches to social spending. These include those around measuring outcomes on social mobility, like the publication I mentioned just now, as well as issues around social inclusion.

In Singapore, for example, we make sure social inclusion is something we work very hard on. Hawker centres are a very good example where the rich and poor dine together under a community hall, and they do not feel rich, do not feel poor. In the same way too, community clubs, even our housing estates, are designed for that.

There are other studies which talk about how it should be done. For example, raising average incomes, building pathways for continuous improvement. These two studies that I have mentioned by the academics —

The Chairman: Minister, if you can wrap up, please.

Mr Masagos Zulkifli B M M: — yes, put emphasis on personal responsibility, the role of the family and not just Government intervention. So, I hope that we do not get fixated by a publication, as popular as it is. But look at the broad literature and the outcomes that we have achieved so far.

10 March 2022
Ministry of Social and Family Development

https://sprs.parl.gov.sg/search/sprs3topic?reportid=budget-1897

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