Ng Kok Hoe on Money FM

Ng Kok Hoe (KH) was on Money FM 89.3 on 15 October to discuss the new MIS report with radio hosts Elliott Danker (ED) and Bharati Jagdish (BJ). We have transcribed the discussion for those who prefer reading to listening. [Edited on 5 November 2021: Some of this post has been edited to improve the earlier transcription, including clarifying parts that were previously inaudible.]

ED: Time to talk about the most talked about headline this week.

BJ: It’s all about how much one would need to support a basic standard of living in Singapore. Apparently, a family of four, for instance, needs $6,426 a month for a basic standard of living. Now, if you haven’t looked at the study yet and you want to, in order to assess whether or not those numbers are accurate by your own measurement, you should pick it up. It’s called ‘What People Need in Singapore: A Household Budget Study’, this year, of course, 2021.

ED: Lots of people are running their own polls based on this study on platforms like Facebook or even Instagram. I’m sure you have your thoughts about how much you really need to meet that basic standard of living in Singapore. But let’s find out more about the findings from one of the six authors of this study, Dr Ng Kok Hoe, Senior Research Fellow, Head, Case Study Unit and Social Inclusion Project, Lee Kuan Yew School of Public Policy at the National University of Singapore. Dr Ng, a good morning to you. How are you?

KH: Good morning, Elliott and Bharati. Very happy to join your show.

ED: So, the study is called ‘What People Need in Singapore: A Household Budget Study’, you guys used the ‘minimum income standard’ research method. This originated in the United Kingdom. What else can you tell us about the methodology of this study?

KH: This is a reliable method, that’s what I’d say. The team assessed it very carefully before we started. We took into account that the method travels well across different countries and cultural contexts. So, apart from the UK, it’s also used in France, Portugal, South Africa, Mexico and, closer to home, Japan and Thailand. In the UK, we noticed that it has been used to set a living wage for UK employees. And it’s also incorporated in a new measure of poverty that the UK government has said they’ll start to monitor. We visited researchers using this method in the UK. We observed them at work. We flew them over, and they observed us and gave guidance. We piloted and adapted the method. So we did consider it very carefully before starting.

BJ: However, Dr Ng, the Ministry of Finance has flagged issues with your report. It says that those of us reading it should bear in mind the limitations of the approach you used. I am sure that you are aware of some of the issues they brought up. For instance, they said that you considered mortgage payments for flats an expenditure item while playing down the point that the non-interest parts of the payments can be seen as savings actually, that can help households build housing equity. Of course, they also raised several other points. What do you have to say to that? I mean, the fact that, also there are errors in certain assumptions which understate the amount of government subsidies and financial support that is given to low-income families.

when it comes to more social aspects of spending, I am not sure whether there is an expert on whether people should be allowed to wear perfume and how much budget is reasonable to put in angbaos or festivals. There are no experts in these domains. So this method says, let’s talk to ordinary members of public, have them agree, have them debate, and then we challenge them for the rationales.

KH: So we are aware of the statement. And I think a number of the points stem from misunderstanding of the method. So some of the things they flagged, for example, as Bharati, you mentioned, was that we downplayed the kind of saving aspect of housing that is in fact an asset. Actually, we don’t downplay it, we completely disregarded it, because the study doesn’t measure income and saving. The study is about what people need, it’s not about how they will pay for them. So housing as an asset will become an income source later in life, and that’s great, but it doesn’t change the amount that people have to pay for housing currently. Something else they flagged was the diversity of the focus groups. So they mentioned, for example, that 15% of our participants were from private housing. Well actually, in Singapore’s general population, about 21% of Singaporeans are in private housing. So we are under-represented in that segment. And they also omitted to mention that 18% of our participants were in fact from HDB rental housing, more than participants from private housing. So in fact, lower-income participants from HDB public rental housing were the ones who were over-represented in our study. And that’s because our average group size is eight persons, so we have to have one to two participants from either private housing or HDB public rental housing, it would already be in excess of 10%.

ED: Mmm, all fair points, Dr Ng. Yeah, they are fair enough. And as I said, I have friends who are running their own polls based on your research paper on their Instagram page. And we see, in a sense, a very negative, if you don’t mind me saying, a very negative receiving of these numbers, $6,000 plus, right? I do want to dial things really far back, and talk simply about what constitutes a basic standard of living when we look at these?

KH: Our discussions all began from a definition of basic standard of living. And this definition was produced by earlier focus groups. And in those earlier focus groups, participants agreed… there were no controversies among participants that, in Singapore today, a basic standard ofOur discussions all begin from a definition of basic standard of living. And this definition itself was produced by earlier focus groups. And in those earlier focus groups, participants agreed, it was not controversial among participants, that in Singapore today, a basic standard of living must go beyond subsistence, it must go beyond survival. People said obviously housing, food and clothing; but we are a wealthy society, it’s not acceptable to stop at there. But that a more reasonable definition of ‘basic’ must include things like opportunity to work, to education. And they also stressed intangible aspects of a basic standard of living. They talked about belonging, respect, security and independence. They talked about the ability to take part in social, cultural and religious activities. And all of these things, so these wordings and language, came from earlier focus groups. They stressed these must, today in Singapore, go into a definition of ‘basic’.

Focus group participants talked about participation in social, cultural and religious activities as part of a basic standard of living.

BJ: Some may say, you know, this is an argument between those who are ideological and the others who prefer to take a technocratic approach to determining what is basic and how much do you really need in order to thrive, not just survive in a country. What’s your argument to that? I mean, which is the better approach? What is the balance?

KH: We are of course very glad that people are paying so much attention to this study. I didn’t know there were polls happening online, so Elliot is more up-to-date than I am. We do want this study to generate discussion and for people to think about their own circumstances and situations through it. We don’t think of this approach as ideological. Maybe to some extent it is conceptual because, as I said, it starts from a definition. But if by technocratic you mean having experts decide what people need, then I do agree that’s what we consciously want to avoid. In fact, this method, when it was first pioneered in the UK more than a decade ago, it is to precisely provide an alternative to having experts say “you need this, you don’t need that, so this is the basket of basic needs because I, expert, say so, and this is how much the basket costs, and so this is what we use”. I mean experts are fine maybe in areas like nutrition and vaccination and so on. But when it comes to more social aspects of spending, I don’t know if there is an expert on whether people should be allowed to wear perfume and how much is reasonable to put in an angbao or spend for festivals. There are no experts in these domains. So this method says, let’s talk to ordinary members of public, have them agree, have them debate, and then we challenge them for these rationales. I mean, if they can agree, then that goes into the basket.

ED: Okay, okay. I think a fair point you bring up, Dr Ng. And I like how you have helped to sort of align how you should receive these, by saying it’s being very conceptual. One thing that stood out to me is that, a single elderly person needs $1,421 a month to meet basic standard of living. I wanna expand on this, or if you can help me out here. I mean, what does it mean for a lot of people in the sandwich group, with an ageing population and there’s a worry that this number could increase. What did the findings say?

KH: So this number is in fact an update from the previous edition of the study that we published in 2019. This time round for the elderly budget, we updated it based on price inflation. So it went up slightly. The concern with the elderly generation is always demography, right? So we know that the CPF produces an amount that is not enough for them to meet their basic needs.

ED: Yeah.

The 2019 MIS report addressed budgets for elderly households. See also Ng Kok Hoe’s op-ed on retirement adequacy at AcademiaSG.

KH: So the strategy has long been, for elderly people, adult children to provide for their needs. I mean, I have been studying this area, CPF income, for some time. And in fact the pillar of retirement income security in Singapore is not the CPF but adult children.

ED: Yeah.

KH: The concern here is very much, as you have put it, with the sandwich generation. Because elderly people in future are going to have fewer adult children, and many of them will not have any children.

ED: Yeah.

KH: So the report flags this concern that we do need to reinforce our retirement income system. And in fact go back even earlier, make sure wages are adequate, make sure people are paid decently, so that they are able to save for retirement.

BJ: Speaking of wages, I mean, recently several measures have been taSpeaking of wages, I mean, recently several measures have been taken to help with social spending in order to help those who need help, financial help, as well as wages with the Progressive Wage Model being enhanced and widened as well. To what extent are these measures enough? Are they at least a good beginning? And how do they need to be developed further in order to make a real dent here?

KH: Wages is really key. So in our report, we flag that, I mean, we say that money must come from somewhere, so it’s either wages or state support. So, even if we say family, their money must come from somewhere, the state or the market. So wages is key. I know the figure of $6,000-odd has been highlighted in headlines, so it’s a distracting one. But the study produced many different calculations. About 70% of households have work incomes above the level that they need, already. And when we look at households with children at different ages, and then deduct government subsidies, the average that two-children households need for a basic standard of living actually falls below $6,000. And if we divide that between two earners, then each earner must earn $2,906. That’s for us a much important figure. And that’s a starting point we recommend for talking about a living wage in Singapore. So for adults with two children, each parent must earn $2,906 for their family to be able to meet basic needs. This number, and if you take away CPF, the gross is $2,484. It’s below $2,500. The median is in fact 56% higher. I don’t know whether most Singaporeans realise how high-earning our society already is. But PWM, as Bharati highlighted, falls grossly short. It’s about 40-50% short of this amount. So this is the figure that we hope we can start discussing as a society, a decent wage that allows households to meet their basic needs.

ED: Oh yeah. That discussion is going to continue for a long time more. We are really glad that we had this conversation. We’ve been speaking with Dr Ng Kok Hoe, who is Senior Research Fellow, Head, Case Study Unit and Social Inclusion Project, Lee Kuan Yew School of Public Policy at the National University of Singapore. Dr Ng, thank you for your time this morning. You take care and stay safe.

KH: Thank you.

MIS in the news (5)

We are pleased to see that our latest report has generated much interest in the week since the launch, with extensive media coverage and online discussion. Here are a few highlights.

A Channel News Asia news clip from 8 October 2021, including interviews with team member Ng Kok Hoe:

Ng Kok Hoe was also on MoneyFM to discuss what one of the radio hosts described as the “most talked about headline this week”. This includes some discussion of concerns raised by the Ministry of Finance.

The Straits Times has carried two op-eds (behind paywall) on the study. ‘What it means to live well in Singapore‘, by Terence Ho, reflects on the concepts of absolute and relative poverty:

Many goods and services provided by the market cater to what the bulk of the population can afford – for instance, casual restaurants have proliferated across suburban malls and residential estates, while hipster cafes are now common in many gentrified precincts in Singapore.

Social exclusion may arise when a child feels she cannot afford to join her friends for lunch at the mall after school, or when her classmates are comparing their holiday experiences abroad and she is left out of the conversation.

There are also social norms dictating the amounts people contribute to funerals or weddings, which impinge on an individual’s social respectability.

Enrichment classes speak to both social norms and social mobility. Notwithstanding the high quality of public education, many parents feel obliged to put their children through private tuition and enrichment programmes, which they view as necessary for their children to keep up or keep ahead.

The approach taken in the household budgets study, subjective as it may be, takes a crack at factoring in social norms and expectations which have a role in shaping social inclusion.

The second op-ed (paywall) was written by MIS team members Teo You Yenn and Ng Kok Hoe. In it we explore the nature of the focus group discussions in more detail, highlighting the dynamics of the deliberations and how we observed groups come to consensus despite variations in their own experiences:

Over these four years, we have learnt from our participants that everyone living in Singapore today has needs for housing, food and clothing, opportunities for education, employment and work-life balance, as well as access to healthcare. Everyone needs a sense of belonging, respect, security and independence. Every person needs choices to participate in social activities, and the freedom to engage in one’s cultural and religious practices.

We have learnt from them too that they know not everyone in Singapore today is meeting these needs to the same degree. This does not lead anyone to say that any of these are therefore not needs; that only those who can afford it deserve belonging, respect, security and independence; that some children should have paid tuition suited to their needs and other children will just have to accept whatever they can get from charity.

In spending time and energy to share their experiences and insights with us, our participants have put in our hands the responsibility of putting this question on the table: If ordinary people can see and express that there are universal needs, that there is a baseline below which no one should fall, what will we do collectively to make sure all members of our society meet these basic needs?

More media:

To Tackle Inequality, Stop Expecting The Same Rules To Make A Difference

In connection with the International Day for the Eradication of Poverty (17 October), two members of the MIS team—Ng Kok Hoe and Teo You Yenn—spoke to RICE Media about policy approaches toward poverty and inequality, including the need to define Minimum Income Standards:

YY: You might not be able to reduce the need for respect to a number, but what we are trying to show is that there are certain monetary preconditions which allow for participation and belonging and respect. Money cannot directly buy these things, but money is absolutely a precondition to achieving those needs. 

KH: This is why standards are important, because until you accept that there are basic levels below which people’s lives will be affected, how can we begin to think about the generosity of social welfare schemes? How can we say that we are interested in helping people meet their needs if we are reluctant to define those needs?

Read the full interview at RICE Media.

Impact of coronavirus on families

A report in The Straits Times today looks at the impact of the coronavirus crisis on low-income families in Singapore:

Adam’s situation is not unique. Many of some 300,000 Singapore residents who earn below $2,000 have seen sudden dips in their income during the pandemic, especially after new measures on April 7 restricted businesses deemed non-essential, among other things.

Beyond Social Services helped 84 families financially in the whole of last month. But just five days into the circuit breaker, it received 123 applications for such help.

The charity contacted 300 families it is helping, and three in four said they needed more financial aid.


Dr Ng Kok Hoe, senior research fellow at the National University of Singapore’s Lee Kuan Yew School of Public Policy, said the “stark policy lesson” is that cracks that are present in normal times will only widen during a crisis. “Problems with food security among poor households, educational inequality, overcrowded housing in the public rental scheme, inadequate social security outside the wage economy… these are the challenges we must tackle with more resolve when the crisis lifts.”

Coronavirus: Families scraping by in tougher spot now

(Note: the article is not paywalled; it can be read without paying for a prescription. But it is necessary to register with the website and sign in with your email address to read it.)

Budget standards and cultural diversity

We have a new opinion piece (paywall) in The Straits Times today, by research team members Neo Yu Wei and Ad Maulod, examining how the definition of a basic standard in living developed by participants in our research reflected Singaporeans’ values relating to cultural diversity–and how they translated this practically and concretely into the household budgets that emerged:

Researchers in other countries have conducted similar research on minimum household budget standards, such as in the United Kingdom, Japan, Mexico, South Africa. However, only in Singapore did participants include the choice and freedom to engage in “one’s cultural and religious practices” as a key basic need. This underlies the importance participants place on being a member of their cultural community.

In discussing how to translate this definition into everyday practice, participants who come from diverse ethnic, religious, and socioeconomic backgrounds, took time to hear different views expressed, acknowledge the importance of different practices, before finding ways to agree on common and shared needs for every older person in Singapore.

A budget standard for everyone in a diverse society‘ by Neo Yu Wei and Ad Maulod (The Straits Times, 28 June 2019)

Our latest opinion piece in TODAY

TODAYonline has just published an opinion piece by Teo You Yenn and Ng Kok Hoe of our research team, exploring what it means to set a baseline for meeting needs:

A key aim in the MIS approach is to translate needs which may initially appear abstract — needs for independence or connection, for example — into concrete things which can be clearly and explicitly budgeted for.

The oft-repeated cliché that “money cannot buy happiness” may well be true in its most literal and simplistic conception, but our participants’ deliberations demonstrated that there are many concrete and material things — which require specific sums of money — that are needed to meet people’s needs.

While these material things cannot guarantee anything as subjective as “happiness”, they are deeply connected to well-being and important preconditions to happiness.

S$1,379 a month needed for basic needs? This is how Singapore’s seniors agree on this baseline‘ by Teo You Yenn and Ng Kok Hoe (TODAYonline, 4 June 2019)

MIS in the news! (4)

Media discussion of our MIS report findings is continuing! In today’s Straits Times, Dr Kanwaljit Soin writes:

We also know that current older workers are paid low wages, with two-thirds employed as cleaners, labourers and related workers, and categorised in the three lowest-paying occupational categories. They are paid less than the sum required for a basic standard of living, if we take $1,379 as the benchmark.

Needy Singapore citizens and permanent residents who are unable to work due to old age, illness, disability or unfavourable family circumstances, have been recipients of what is known as the Public Assistance Scheme and now called the ComCare Long-Term Assistance scheme.

The sum given per month for many years was about $500 and below, and finally increased to $600 per person this year, with two-person households getting $1,000.
Looking at CPF and retirement schemes shows there are real shortfalls in achieving the MIS through these routes.

Manpower Minister Josephine Teo revealed in Parliament in February that nearly three-quarters of those getting monthly payouts from the CPF Life Scheme or Retirement Sum Scheme receive less than $500 a month, while average monthly payouts for those between 70 and 79 was just $290.

Only 268,000 people were receiving these payments. The number of people over 65 is more than half a million, and so the remainder was left out of these two schemes.

Helping the elderly thrive is good for Singapore as a community‘ by Kanwaljit Soin (The Straits Times, 4 June 2019)

There were also several reports on the weekend:

MIS in the news (3)

We’re very pleased to see that the discussion on how to meet the needs of older people is continuing — and deepening!

“It doesn’t mean that once I reach 60 years old, I become a different person; I stay at home and eat porridge and face the four walls.”

How much is enough? Social workers and financial experts weigh in on meeting seniors’ basic needs‘ by Janice Lim (TODAYonline, 26 May 2019)

Throughout his presentation, Dr Ng repeatedly emphasised how participants were plagued by a pervading sense of anxiety. Many of them were extremely conscious of how old age is usually accompanied by declining health and consequently higher costs of healthcare. The sentiment of not wanting to feel like “a burden” to their families was a common thread as well.

Basic Living Needs for the Elderly Include Smartphones and An Annual Holiday. So What?‘ by Ethel Pang (Rice Media, 26 May 2019)

Further links: