Factors Leading to Decline in Real Income Growth for Bottom 10% of Income Earners and Additional Help Initiatives Being Considered

Parliamentary Question by Mr Yip Hon Weng:

To ask the Deputy Prime Minister and Minister for Finance (a) what are the factors leading to a decline in real income growth for the bottom 10% of income earners in 2023 despite the positive increase in median monthly household income and a lower overall Gini coefficient figure; and (b) whether there are additional initiatives or policy adjustments being considered to help the low-income households particularly in areas like essential goods, utilities and transport.

Parliamentary Reply by Deputy Prime Minister and Minister for Finance, Mr Lawrence Wong:

I believe that the Member's questions pertain to data recently released by the Department of Statistics on Key Household Income Trends 2023.

In 2023, the average real household income per member for the 2nd to 8th deciles of resident employed households was positive, whereas the 1st, 9th and 10th deciles saw negative real income growth. This pattern reflects the uneven effects of slower growth amidst higher prices last year.

Notwithstanding this, the bottom 10% has experienced good real income growth over the last decade, with an annualised growth in real household income per member of 2.1% over the past 5 years, and 3.2% over the past 10 years.

We will continue to uplift our lower-wage workers through Progressive Wages and Workfare. As announced at Budget 2024, the Local Qualifying Salary (LQS) will be raised from $1,400 to $1,600 per month from July 2024, and Workfare will provide increased support from January 2025. The LQS change complements the expansion of the Progressive Wage Model to more sectors and the introduction of Occupational Progressive Wages for administrators and drivers over the past two years.

We are also doing more to help lower-income households with a range of measures, including in areas like daily essentials, utilities and public transport, especially through the enhanced Assurance Package. Lower-income individuals and households will get more support from these measures.