Government Focuses on Fairness Amid Rising Foreign Investments
Finance Minister and Deputy Prime Minister Lawrence Wong announced on February 23 that income inequality in Singapore has steadily decreased over the past decade, despite the increasing number of wealthy foreign investors establishing family offices in the country.
Responding to a parliamentary query by Member of Parliament Yip Hon Weng, Wong stated that there is no evidence suggesting family offices have widened the income gap. He assured that the government continues to monitor inequality closely while fostering an environment that attracts foreign investments.
Family Offices Boost Singapore’s Investment Appeal
Wong highlighted that family offices are primarily established to manage their families’ funds, often targeting broader investment opportunities in Asia. Alongside institutional fund managers and sovereign wealth funds, family offices contribute to Singapore’s position as a key asset management hub and generate jobs for locals.
Steady Decline in Income Inequality
Wong pointed out that the Gini coefficient, a key measure of income inequality, fell from 0.478 in 2012 to 0.437 in 2022. When adjusted for redistribution via taxes and transfers, the Gini coefficient further dropped to 0.378 in 2022, down from 0.432 in 2012.
He also noted that income growth among lower-income groups has outpaced median income growth. Workers at the 20th percentile experienced a real annualised income growth of 3.5% from 2012 to 2022, compared to 2.6% at the median.
Measures to Support Lower-Wage Workers
To further bridge the income gap, Wong emphasised government initiatives such as the Workfare Income Supplement Scheme and the Progressive Wage Model, which aim to uplift lower-wage workers.
Additionally, Singapore’s tax and transfer system remains designed to be “fair and progressive,” ensuring higher contributions from wealthier individuals while providing more significant support for vulnerable groups.
These measures, Wong concluded, reflect the government’s commitment to balanced growth that benefits all Singaporeans.
