Here's one proof that Singapore's income divide is worsening

On back of heightened globalisation.

According to DBS, the widening income gap remains a key challenge. PM Lee has pointed out that this is one of three fault lines in the Singapore economy today, and comes against the backdrop of increasing globalisation.

Based on the Gini coefficient computed by the Department of Statistics, the income divide in Singapore is indeed worsening (See chart).

Here's more:

Despite efforts to lower the Gini coefficient (from 0.488 down to 0.459) via government transfers in 2012, the Gini coefficient risen significantly since 2011. Hence, expect policy measures to continue to focus on narrowing the income gap in this budget.

Top-ups were made to a wide range of public assistance schemes while improvements on the Workfare Income Supplement (WIS) scheme and the Workfare Training Scheme (WTS) have been introduced to help the low-waged workers in the last budget.

Additional GST vouchers and tax rebates were also given in a bid to help the low and middle income residents cope with the rising cost of living.

More will be done in this budget. Apart from further enhancements to some of the existing schemes, there may be more generous funding on healthcare and pre-school education to defray the rising costs in these areas. After housing and transportation, healthcare and education have been the next two fastest rising components within the CPI baskets over the last three years.

Healthcare and education costs have risen by 3.6% and 3.2% per year since 2011. In addition, there may be heavier taxes on the higher income earners to cater for the higher social expenditure. Budget 2013 saw the shift in the tax regime towards taxing assets rather than income.

The property tax structure was revised to be more progressive while tax rate for high end cars was raised. Fur- ther hikes in asset related taxes to raise the overall effective tax rate of the higher income earners should not be discounted in this budget.