Cost of living reports do not reflect costs for locals: DPM Tharman

SINGAPORE — Cost of living reports — such as the one released by the Economist Intelligence Unit 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 today (Mar 5).

There are two things which make a big difference when comparing cost of living for expatriates and locals, Mr Tharman said, as he wrapped up the Budget debate in Parliament.

The first is currency, he said. 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 item is improved.

The second is the difference in items being measured, Mr Tharman said. The EIU study measured items such as imported cheese, which may not be purchased by Singapore residents. Singapore’s public transport cost is also significantly cheaper than most other cities like Tokyo and Paris, he said.

What is important for the Government is that Singaporeans, particularly those in the low and middle income groups, have incomes that grew faster. In the last five years, incomes of median households have surpassed that of the increase in inflation, Mr Tharman pointed out.