Chairman, earlier this month, the Ministry of Finance published Singapore's wealth inequality data for the first time. Our wealth Gini stands at 0.55 — higher than our income Gini, and likely an underestimate.
Wealth and income inequality are distinct problems requiring distinct solutions. Wealth compounds across a lifetime and passes down across generations. MOF's own data shows social mobility is moderating — among children born to fathers in the bottom 20 per cent, the proportion who remained stuck in that bracket increased across successive cohorts. The ladder is still there. But the rungs are getting further apart.
The Child Development Account has one great feature: the First Step Grant is automatic. But the CDA is designed for money to be spent — on healthcare and childcare — not saved. And its most substantial feature, co-matching of up to $15,000, accrues only to families who can afford to deposit first. The families who need the most help benefit the least.
I propose Singapore study the introduction of a Baby Bond: a universal state-endowed account opened automatically at birth, invested in a diversified, low-cost portfolio over 18 years. If directed to Singapore equities, it gives every Singaporean child a stake in the nation. Time and compounding do the heavy lifting. A meaningful endowment, invested early, becomes real capital by adulthood.
Three design principles. One: a universal starting grant—the same base endowment for every child. After all, we are all equal at birth. Two: public funding only, no private contributions. The UK's Child Trust Fund allowed private top-ups and ended up compounding the advantage of families already ahead. Three: withdrawals restricted to wealth-building uses — education, entrepreneurship, housing, or retirement savings.
One more reason this is timely. The CPF Lifetime Retirement Investment Scheme launches in 2028. A Baby Bond built on the same lifecycle investment logic could roll over directly into the LRIS at maturity — potentially structured as an extension of the same scheme, drawing on the same commercial providers.
A hypothetical $5,000 endowment, compounded over a lifetime, could become $200,000 at age 65, if using a conservative lifecycle approach. Or $400,000 or more, if using a more aggressive, equities-only strategy.
Chairman, I ask the Prime Minister's Office to commission a feasibility study on a Baby Bond scheme for Singapore. It will be a useful arrow in our quiver to tackle wealth inequality.
