While the findings of the latest Economist Intelligence Unit (EIU) report serves as a useful tool for HR managers and corporate HQs, it does not necessarily reflect the cost of living for an ordinary local in Singapore, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam. The EIU report released on Tuesday ranked Singapore the most expensive city in the world. In his wrap-up speech on the Budget debate yesterday, Mr Tharman noted that the survey was basically aimed at comparing the cost of living of expatriates in different cities or countries. Hence, there are two things that make the survey “quite different from the factors that affect the cost of living for Singaporeans”. The first is exchange rates. Mr Tharman explained that the stronger Singapore dollar has made Singapore an expensive place to live for expatriates. But it is the opposite for Singaporeans. In fact, the stronger Singapore dollar improves the purchasing power of Singaporeans here and abroad. This is because imported goods become cheaper and most of the food and everyday items in Singapore are largely imported. Another important difference is the good and services measured as part of the cost of living basket in the survey. Mr Tharman noted that the cost of living basket used in the survey is different from the cost of living basket of ordinary Singaporeans. “That is the basic difference. From time to time, these surveys will come up, and people will give it a spin, but they are measuring something quite different from the cost of living for our residents.” “What is important for us is that Singaporeans, and particularly low- and middle-income Singaporeans, have incomes that grow faster than the cost of living. That is what is important and what we have fortunately been able to achieve,” added Mr Tharman. Meanwhile, Richard Jerram, Chief Economist for the Bank of Singapore, yesterday noted how a single unique factor in the survey – COEs in the case of Singapore – can have a significant impact on the outcome as a whole. Separately, speaking during a Channel NewsAsia interview on Tuesday evening, PropertyGuru’s International Group Editor Andrew Batt said that whilst there are certainly some products and services in the Economist Intelligence Unit survey that are aimed specifically at expatriates, such as the cost of international schooling, many of the survey items are ones that will be used on a daily basis by Singaporeans, such as food and fuel. Batt also noted how the results of the survey can be used by Singaporean companies who are looking to expand beyond the city-state to adequately compensate their staff sent overseas.
Posted on: Thu, 06 Mar 2014 11:17:35 +0000
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