Inflation figure for CPF Minimum Sum hikes under review: Tan Chuan-Jin

A man walks past the CPF Building along Robinson Road. -- PHOTO: ST FILE
A man walks past the CPF Building along Robinson Road. -- PHOTO: ST FILE

The Government is looking at how it calculates the Central Provident Fund (CPF) Minimum Sum figure, and the amount by which it should go up every year based on inflation, said Manpower Minister Tan Chuan-Jin on Tuesday.

Currently, the CPF Minimum Sum is pegged to the Consumer Price Index, a measure of inflation.

This rate includes imputed rent, which is what home owners would pay if they were renting their homes.

Said Mr Tan: "In terms of computing our inflation rate, one of the things we're looking at is actually imputed rents...(this) is something that perhaps we may want to consider not including."

He was responding to an audience member at a CPF forum, who questioned the inclusion of imputed rents in the calculation of Minimum Sum because many Singaporeans own their homes.

The audience member said that excluding the imputed rents would lower the Minimum Sum by $10,000.

The forum, organised by the Institute of Policy Studies, also saw a debate over whether wages were growing at an appropriate pace.

Two audience members said that because of inflation, wages were not growing fast enough to keep pace with the Minimum Sum which was rising faster.

But another audience member expressed concern about whether Singapore's higher wages were eroding its economic competitiveness, and asked if the Government would rethink foreign labour quotas.

Mr Tan replied: "The Government is not envisioning loosening the tight labour market. Foreign labour growth needs to be kept at a sustainable pace."

Mr Tan also said that many other countries also grapple with stagnating wages, and Singapore's wages have grown 2 to 3 per cent in real terms in the last few years.

He added that wages for lower-income Singaporeans have also risen in the last few years, thanks to the Progressive Wage Model and other measures.