Top 5% of households in S’pore hold one-third of wealth: Jeffrey Siow

The Gini coefficient measures inequality on a scale of 0 to 1, with higher values indicating greater inequality.

Mr Siow said in his reply that the data on wealth concentration should be interpreted with caution due to sample size limitations and potential under-reporting in survey responses at both ends of the wealth distribution spectrum.

The minister told the House that Singapore’s wealth concentration levels are broadly comparable to those of advanced economies with similar wealth Gini coefficients. Wealth inequality is higher than income inequality in all advanced economies as wealth accumulates over the life cycle, he added.

While wealth data is “notoriously hard” to measure given overseas assets and unlisted wealth, Mr Siow said the Government had made its best effort to do so by combining survey data from the five-yearly Household Expenditure Survey with administrative data such as on properties, CPF accounts, Singapore Savings Bonds and securities held in Central Depository accounts.

“We have no plans at this point to seek additional legislative or administrative powers to require more granular asset disclosure solely for inequality measurement,” he said.

Mr Siow said that as this was the Republic’s first compilation of the wealth Gini coefficient, there is no historical series. However, the Government intends to track this measure over time, and will consider additional indicators in the next Household Expenditure Survey due in 2028.

Wealth inequality looks at the distribution of assets and liabilities, such as property, mortgages, stocks and savings, while income inequality looks at the distribution of income across the population. The Feb 9 paper was the first time the Government had published a measure of wealth inequality here.

Nominated MP Kenneth Goh asked how the Government intends to use the wealth inequality statistic, such as whether there is a threshold for wealth inequality that would warrant certain actions.

Mr Siow said that while the absolute Gini figure gives an indication of where Singapore is relative to other countries, the Government will look at the trend over time to see if wealth inequality here is moving in the right direction.

“The enhanced data and methodology that we have used for both income inequality as well as wealth inequality will improve our understanding of the states of inequality in Singapore, which will better help us develop more evidence-based and targeted policies to improve Singaporeans’ lives,” he said.

Mr Yip Hon Weng (Yio Chu Kang) asked if there would be additional safeguards to ensure that measures aimed at reducing wealth inequality do not unintentionally strain retirees, who may have assets but no income.

Mr Siow replied that the current property tax system is progressive, where investment properties and higher-value properties are taxed more, while home owners with only one property are taxed less and receive property tax rebates.

Nevertheless, the Government understands the concerns of individual property owners with different financial circumstances, he added. For asset-rich but income-poor seniors, there are deferral mechanisms and interest-free instalment plans for property tax payments to ease cash flow pressures.

Mr Gerald Giam (Aljunied GRC) asked if the Government was looking at ways to shift the tax burden away from work and income and towards wealth, given that wealth inequality was significantly higher than income inequality.

Mr Siow said the Government “remains open to a broad approach” to taxation, and that Singapore’s system has so far achieved real income growth and a decline in inequality.

“As our society ages and we move towards an older society where there is more asset owning, (further wealth taxation) is something we can consider,” he said.

“But we have to do this carefully so that we know that the outcomes that we want to achieve can be done so without too much social perturbation.”