Why cost of living reports apply only to expats
COST-OF-LIVING reports, such as the Economist Intelligence Unit (EIU) one that has just ranked Singapore the priciest city in the world, are aimed at comparing living costs for expatriates and thus do not reflect those for a local resident, Finance Minister Tharman Shanmugaratnam said in his wrap-up speech on the Budget debate yesterday.
Thus, there are two important differences between what such reports measure and what affects the living costs of Singaporeans, he added.
One is currency. "An important reason why we've become expensive for expatriates is that the Singapore dollar has strengthened," said Mr Tharman.
That makes things pricier for an expatriate who is paid in a foreign currency. But it improves Singaporeans' purchasing power, both at home when buying imported goods, and abroad.
The second important difference is the goods and services whose prices are being measured, which are "quite different from (those) consumed by ordinary Singaporeans".
Mr Tharman listed a few of the things included in the EIU consumption basket: imported cheese, fillet mignon, "Burberry-type raincoats", the four best seats in a theatre and three-course dinners in high-end restaurants for four people.
In addition, when it comes to transport, these expatriate cost-of-living surveys take into account only the cost of cars and taxis, not public transport.
Cars here are indeed more expensive than in other cities because Singapore is a small country, but its public-transport and taxi fares are cheaper than in many other hubs, noted Mr Tharman.
"It's not that these surveys are wrong, it's not that they are misguided. They're measuring something quite different from the cost of living for an ordinary local," he said.
THE STRAITS TIMES