Dont talk much..well show you the Way To FREEDOM facebook/snesingapore Cost of living reports do not reflect costs for locals:(Someone says) SINGAPORE: Cost of living reports, such as the one released by the Economist Intelligence Unit (EIU) which ranked Singapore as the costliest place to live in, are meant to measure cost of living for expatriates in various parts of the world, and thus do not reflect those of local residents, said Deputy Prime Minister Tharman Shanmugaratnam. There are two things which make a big difference when comparing cost of living for expatriates and locals, Mr Tharman, who is also Finance Minister, said as he wrapped up the Budget debate in Parliament on Wednesday. The first, he said, is currency -- in Singapore’s case, the Singapore dollar has strengthened over the years, and this means it is more expensive for expatriates who are paid in a foreign currency. A stronger Singapore dollar also improves lives in Singapore, as purchasing power for items is improved, he added. The second factor is the difference in items being measured -- the EIU study measured items such as imported cheese, which may not be purchased by Singapore residents, said Mr Tharman. He said: So for example, the EIU basket includes imported cheese, filet mignon, Burberry-type raincoats, four best seats in a theatre, three-course high-end dinners for four people... I dont think theyre irrelevant to an expatriate cost of living basket but its quite different from cost of living basket for Singaporeans. For some of these items, Singapore is quite expensive. Transport is also part of the cost of living basket for these cost of living indexes but no public transport -- its just cars and taxis. And our public transport as you know, is in fact significantly cheaper than most other cities (like) New York, London and Tokyo. Were comparable to Hong Kong but significantly cheaper than most other cities, even our taxi fares are cheaper, but our cars are expensive because we are small. He added that a survey by the Asia Competitiveness Institute similarly ranked Singapore fifth out of 109 cities on cost of living for expats. But on cost of living for Singapore residents, the city was ranked 61st. What is important for the government, Mr Tharman said, is that Singaporeans, particularly those in the low and middle income groups, have incomes that grew faster. He pointed out that in the last five years, incomes of median households have surpassed that of the increase in inflation. Mr Tharman said: In the last five years alone, if you take our middle-income households, our median households, their incomes have gone up faster than the CPI index, the cost of living. In fact, its gone up by 10 per cent in real terms. (Theres a) similar rate of growth for the low-income households, about 10 per cent in real terms. And indeed for the low-income households, if you exclude from the CPI index imputed rentals for those who are in fact owning their homes, and they dont have to pay rentals... then actually the increase in real incomes of the 20th percentile was 19 per cent over the last five years. But another challenge the city faces is the rising cost of business -- as a result of higher rental and higher wages due to the tight labour market. He said: The wrong strategy would be to weaken our economy, be a less vibrant economy and you can think of many cities, not so far from where we are, which are less vibrant, and the cost of living is lower. Cost of living is significantly lower because you dont have wage pressures and rentals are cheap, cost of living is lower. But thats not what our business community wants and thats not what Singaporeans want. So weve got to keep this a vibrant place, keep a check on cost to make sure they dont rise persistently, faster than business profits or wages. Thats our strategy. But accept that we are not going to be a cheap location for business. Mr Tharman said Singapore is not going to be a cheap location for business. However, the key is to ensure that costs do not rise faster than profits or wages. Analysts said businesses should also look at what Singapore can offer. David Ang of Human Capital Singapore, said: There are a lot of positives going for Singapore, in terms of security, politically stable, and also at the same time, theres a lot of infrastructure that enables businesses to do their business very well. Then of course, if you need to send an expatriate, you need to see to what extent and at what level these people will be sent to Singapore. I think it is also to look at the local Singaporeans, whether they have the skill or knowledge. If they have, why not mitigate your costs of doing business by employing Singaporeans? Mr Ang said this does not mean companies will stop sending expats to Singapore, adding that many hirers will consider the big picture before making the decision. channelnewsasia/news/singapore/cost-of-living-reports-do/1021364.html
Posted on: Thu, 06 Mar 2014 14:41:21 +0000
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