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S’pore’s median income growth outpaces other countries in its league

SINGAPORE – Median income growth in the Republic has grown quicker than the rise in cost of living in the five years till 2014 — an unusual achievement that can be sustained if Singapore presses on with its restructuring efforts, Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam said yesterday.

S’pore’s median income growth outpaces other countries in its league

DPM Tharman Shanmugaratnam. TODAY file photo

SINGAPORE – Median income growth in the Republic has grown quicker than the rise in cost of living in the five years till 2014 — an unusual achievement that can be sustained if Singapore presses on with its restructuring efforts, Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam said yesterday.

Opposition candidates have, in the last few days of election campaigning, taken issue with the inflow of foreigners whom they said have snatched jobs from Singaporeans, which left them unable to cope with the rise in cost of living.

But Mr Tharman said real median income growth, which is calculated after taking inflation into account, grew 18 per cent from 2010 to last year, far outpacing that of “countries in the same league” as Singapore such as Hong Kong and Taiwan, whose real median income was flat and fell, respectively. Speaking to reporters on the sidelines of a visit to Taman Jurong Market and Food Centre yesterday, he added that Singapore was able to achieve this “unusual performance” because the economy created more jobs post-Global Financial Crisis.

But sustaining this is challenging, given the uncertain external environment where the slowdown in China is quicker than many had anticipated, while Singapore’s neighbours Malaysia and Indonesia face political uncertainties, Mr Tharman said.

In advanced countries such as the United States, investments have been weak, and this will have a spillover effect on Singapore.

“When you add it all up, it’s a sluggish international environment. I say this not to spread fear, but to underline the practical challenges that we have to recognise (and) to underline the confidence investors and businesses still have on Singapore because they know we’ve got policies that are working, and they know that from our track record, we can deal with crises when they occur,” he said.

Helping businesses here to restructure to be more productive is a long process, he added, but Singapore has done well with 3 per cent growth per annum in terms of value added per hour in the past five years.

The Government has also put in place schemes to help workers upgrade their skill sets and remain relevant to the workforce. Mr Tharman said “particular focus” is paid to the middle-aged Singaporeans as they are the ones “finding it really tough” when they lose their jobs. One initiative that has been introduced is SkillsFuture, in which those aged 40 and above can receive subsidies to cover at least 90 per cent of courses funded by the Ministry of Education.

“(The Government) is doing more, but we also need employers to do their part. There will be no U-turn in our labour policies, employers must recognise the value in every middle-aged Singaporean … Employers must recognise this is a permanently tight labour market, they can develop (middle-aged workers), take advantage of Government schemes, and we can go forward together and can sustain the unusual real income growth,” Mr Tharman said.

“If we don’t persist on restructuring, and that means not being simplistic about things and go for strategy that wipes out our large segment of businesses, and hope that somehow or rather productivity is summoned up. Neither does it mean we stay with the status quo. We must push ahead in a steady pace, keep up the pace of restructuring, we’re not doing a U-turn,” he added.

CORRECTION: We misquoted Mr Tharman in an earlier version of this report. In the quote above, he used the word "persist" and not "insist" as earlier quoted. We are sorry for the error. 

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