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Source: Channel News Asia.

Singapore PM earned 70% of US President’s pay in 1985 but now it’s 500% more

During a Parliamentary budget debate in Mar 1985, then opposition Member of Parliament JB Jeyaretnam revealed that the salary of Singapore Prime Minister already exceeded that of first world countries like UK and New Zealand.

Mr Jeyaretnam: Mr Speaker, Sir, the Prime Minister keeps talking about, "Let's have a sense of proportion." This is what I am trying to urge upon the Prime Minister, believe me, to have a sense of proportion. And I think you will get that if you compare the responsibilities and the duties of your office with the responsibilities and duties of office in other countries, and then begin to see what they are paid and what the Ministers are paid here.

In my Table that I have presented, the Prime Minister gets nearly four times what the Prime Minister in the United Kingdom gets, and what the Prime Minister in New Zealand gets. And three times more than what the Prime Minister in Malaysia gets. Is the Prime Minister of the view that his salary should be equated to the President of the United States? Because he is the only one who is getting more. He is getting $45,000 (per month) while the Prime Minister here is getting $30,976 (per month).

And, according to figures produced by Mr Jeyaretnam at the time, the PM of Singapore, which was a third world country then, was already earning close to 70% of what the President of US earned ($30,976 vs $45,000 - inclusive of expense allowance).

Then PM Lee Kuan Yew explained to the House that if he were allowed to retire and then enlisted back into the service, he would in fact be getting more.

The Prime Minister: My colleagues, with the exception of Mr Rajaratnam, the Minister for the Environment, who was a Lecturer in the University when he first joined us, and the Minister for Home Affairs, they would all walk back into better paid jobs. It is as simple as that.
This is the quality of men we are looking for. I do not want to belabour this point. But I am looking for good men who can do the job. You can get any number of people to become Ministers. But can they discharge their obligations honourably, competently? If you want that quality of manpower, and those of us who have attended CPA meetings must know, you can compare and contrast. We know that the quality of the Members of Parliament has visibly risen and with it the quality of the Ministers. The two are related.

Today, the PM of Singapore, who is the son of Lee Kuan Yew, earns the highest salary among the first world leaders with a base pay of S$2.2 million or USD1.7 million. When bonuses included, his pay would reach close or pass S$3 million with maximum bonuses given or USD$2.3 million.

Top 10 highest paid head of government of OECD Countries (USD):

  1. Malcolm Turnbull - Prime Minister - $527,854
  2. Alain Berset of Switzerland - $482,958
  3. Donald Trump US President - $400,000
  4. Angela Merkel - Chancellor of Germany - $369,727
  5. Jacinda Ardern - Prime Minister of New Zealand - $339,862
  6. Sebastian Kurz - Chancellor - $328,584
  7. Xavier Bettel - Prime Minister of Luxembourg - $278,035
  8. Justin Trudeau, Prime Minister of Canada- $267,041
  9. Charles Michel - Prime Minister of Belgium - $262,964
  10. Lars Løkke Rasmussen - Prime Minister of Denmark- $249,774

So, comparing back with the salary of US President, Singapore PM would now be earning close to at least 6 times or 500% more than what the US President earns.

And if we compare the earnings of the head of states in some of these OECD countries with the average salary of their citizens, we get a range from 6 to 10 times:

  1. Enrique Peña Nieto, President of Mexico - earns 10x the average salary in Mexico
  2. Malcolm Turnbull, Prime Minster of Australia - earns 10x average salary in Australia
  3. Jacinda Ardern, Prime Minister of New Zealand - earns 8x average salary in NZ
  4. Alain Berset, President of Switzerland - earns 8x average salary in Switzerland
  5. Angela Merkel, Chancellor of Germany - earns 8x average salary in Germany
  6. Sebastian Kurz, Chancellor of Austria - earns 7x average salary in Austria
  7. Sebastián Piñera, President of Chile - earns 7x average salary in Chile
  8. Donald Trump, President of the US - earns 6x average salary in the US
  9. Recep Tayyip Erdoğan , President of Turkey - earns 6x average salary in Turkey
  10. Stefan Löfven, Prime Minister of Sweden - earns 6x average salary in Sweden

For Singapore, if we were to take the average income of a Singaporean to be S$4,232, the annual wage would be around S$55,000. Taking PM Lee's base pay (not including bonuses) of S$2,200,000, it would work out to be 40 times that of the average salary of a Singaporean.

Hence, it's no surprise that Singaporeans have been complaining about the big wage gap that exists in Singapore.