SHOW ME THE MONEY: A COMPARISON OF INCOMES
Singaporean. Numbeo, the world’s largest user-generated online
database of cost of living also states that the local purchasing
power (the number of goods that can be purchased with a unit
of currency) in Singapore is 63.36, but a much stronger 105.18
for Melbourne. And what about those pesky exchange rates
that everyone keeps harping about? Well, a Deutsche Bank
report, The Random Walk: Mapping the World’s Prices 2013,
Before comparing individual consumer prices, we’ll need to
benchmark incomes, spending power and disposable personal
incomes across Singapore and Melbourne. We’ve decided to take
an average exchange of SGD1.20 to AUD1, based on the year’s
fluctuations that ranged between SGD1.30 and SGD1.10 for 1
Australian dollar.
According to the Department of Statistics
Singapore and Ministry of Manpower, the
median gross monthly income (or the
income of a typical worker in the middle
of the income distribution of workers)
including CPF contributions is SGD3,480.
This means that after deductions,
employees are left with 80 percent of their
salaries to spend per month at SGD2,784.
After income tax, it would leave them with
about SGD2,727.90 for life’s necessities
and paying the bills. This is before tax
reliefs. [see TABLE 1]
Over in the World’s Most Liveable City,
the National Centre for Social and
Economic Modelling (NATSEM) calculated
the median income distribution to be
AUD3,591.67 (SGD4,310) per month. Using
both values and even with a much higher
income tax rate that soars to 44.9 percent,
plus a 1.5-percent deduction for Medicare
Levy, the disposable income drops to
AUD3,074.94 (SGD3,690). [see TABLE 2]
Based on those numbers, it would mean
that the take-home cash of a Melbournian
is about 35 percent more than a
It’s not a surprise
that Singapore is
the most expensive
city in the world
when you’re talking
about a particular
basket of goods
and services that
includes cars. And
yes the cost of
living has gone up,
but is Singapore
the most
expensive city? It
depends on what
you’re comparing.
AUSTRALIA Melbourne
TABLE 1
Chargeable Income ($)
On the first
On the next
Rate (%)
40,000
Gross Tax Payable ($)
40,000
550
7.0
7% x (41,760 - 40,000) = 123.20
Total Tax: $673.20 (year) or $56.10 (av. month)
Personal income tax for a Singaporean earning $3,480/month or $41,760/year.
TABLE 2
Taxable Income ($)
Rate
Gross Tax Payable
0 - 18,200
Nil
18,201 - 37,000
19c for each $1
over $18,200
37,001 - 80,000
$3,572 + 32.5c
for each $1
over $37,000
$3,572 + (0.325 x (43,100 - 37,000))
= $5,554.50
Total Tax: $5,554.50 (year) or $462.86 (av. month)
Personal income tax for an Australian earning $3,591.67/month or $43,100/year.
TABLE 3: PRICE COMPARISONS BY EIU
Item/Price
When
Singapore (1st)
Melbourne (6th)
Average US$ price
1kg loaf of bread
Current
$3.36
$4.43
$3.25
$4.87
$2.90
$3.77
10 years ago
Average US$ price 1 litre
unleaded petrol
Last year
5 years ago
$2.97
$2.19
Current
$1.73
$1.35
Last year
$1.74
$1.49
5 years ago
1 bottle table wine
(750ml)
$1.36
$1.28
10 years ago
$0.69
$0.57
Current
$25.04
$22.28
Last year
$25.65
$25.03
5 years ago
$22.52
$17.45
10 years ago
$13.25
$11.11
TABLE 4
Item/Price
Singapore (av. S$)
Melbourne (av. AUD)
Fresh milk 1L (Pura)
3.70
1.95 (S$2.34)
White bread 650g
1.43
1.08 (S$1.30)
Minced meat 500g
7.85
4.33 (S$5.20)
San Remo Pasta (spaghetti) 500g
2.45
2.43 (S$2.92)
Broccoli 300g
2.52
1.95 (S$2.34)
Tomatoes 500g
2.13
3.48 (S$4.18)
Carton of 12 eggs
3.18
4.52 (S$5.42)
White rice 5kg
9.85
13.05 (S$15.66)
Toilet paper 20 rolls
9.58
10.70 (S$12.84)
Milk formula 800g tin
45.61
21.58 (S$25.90)
Diapers 24pack
8.2
9.1 (S$10.92)
PROS
Stronger purchasing power (your dollar stretches further)
Arguably higher income, in spite of higher taxes
Cheaper baby milk formula
Cars are cheaper
Slightly cheaper to raise a child
CONS
More expensive to eat out
Pricey public transport
Costly entertainment, clothes and cigarettes
16
Family & Life • May 2014