Singapore Prime Minister’s annual salary jumps from $42,000 to $2.2 million within 50 years

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As the cost of living for many Singaporeans continue to rise – what with the hefty water price increase, electricity tariffs increase and impending Goods and Services Tax hike – several Singaporeans are complaining about the high salaries and perks parliamentarians and ministers receive.

Compounded by stories of the elderly and the needy struggling to survive and given the perception that it is difficult to receive timely help from government programmes, like the current public healthcare insurance scheme, Singaporeans on social media have pointed out that the nation’s leaders’ pay packets have grown considerably even while some in society grow more and more desperate.

Recently, a photo alleging that the Prime Minister’s salary has grown by a whopping 5238 per cent since 1965 has been circulating online. The picture has already garnered about 600 shares since it was published on social media yesterday.

Indeed, the Prime Minister’s salary has grown significantly since Singapore gained independence in 1965. In 1965, Singapore’s founding Prime Minister – the late Lee Kuan Yew who was then known as the Chief Minister – earned a monthly fixed salary of $3,500. This means that he was paid $42,000 annually.

In 1973, the Prime Minister’s salary was bumped up to a monthly sum of $9,500 while other ministers started to earn $7,000 – nearly double the $4,500 they used to earn – following a ministerial salary review.

$9,500 and $7,000 in 1973 roughly translates to $27,742 and $20,441 respectively in 2016 when adjusted for inflation. This is still nowhere near what Lee’s son, Singapore’s third and current Prime Minister Lee Hsien Loong, earns.

Justifying the salary increase in 1973, the elder Lee said: “Too great a disparity between Ministerial rewards and what Ministers, with business experience and professional qualifications, could earn outside will make it increasingly difficult to assemble a successor government.”

Then, 20 years later in 1994, the first framework for ministerial salaries came into play. The policy, which saw ministers being paid two-thirds of what the top four earners from six professions in the private sector earn, caused ministerial salaries to balloon. Lee Kuan Yew explained then:

“Sir, my generation of political leaders have become dinosaurs, an extinct breed of men who went into politics because of the passion of their convictions.
“The problem now is a simple one: How to select younger leaders when the conditions that had motivated the Old Guards to sacrifice promising prospects of a good life for a political cause are no longer obtainable in a completely different social climate?
“This change in climate is inevitable with economic progress and a change in social values.Let me explain very simply, Mr Speaker, that MPs are real men and women, just like you and me, with real families who have real aspirations in life. So when we talk of all these high-falutin, noble, lofty causes, remember at the end of the day, very few people become priests.”

In 1996, two years after the White Paper on “Competitive Salaries for Competent and Honest Government” was released, Lee added: “People accept the principle of pegging Ministers’ salaries to the top men in the private sector, but to many people the top salaries are too large.”

Ten years after the ministerial salary framework was released, Lee Hsien Loong took over the reins of the nation from his father’s successor, now-Emeritus Senior Minister Goh Chok Tong. In 2007, Lee Hsien Loong’s annual salary climbed to a whopping $3,090,000 under this framework.

And then, the unthinkable happened. In 2011, the ruling party lost a Group Representation Constituency (GRC) to the opposition and public support for the People’s Action Party (PAP) slipped.

In 2012, for possibly the first time ever, Singapore’s ministers took a pay cut. An independent committee reviewed the ministerial salary scheme and recommended the following salary cuts:

  • President’s annual salary to be slashed by 51 per cent to $1.54 million;
  • Prime Minister’s annual salary to be cut by 36 per cent to $2.2 million, along with the removal of pension;
  • Full minister’s (MR4 level) annual salary to be reduced by 37 per cent to $1.1 million, along with the removal of pension;
  • Prime Minister’s salary to be pegged to double the MR4 salary;
  • MP’s annual allowance to be cut by 3 per cent to $192,500; and
  • The entry MR4 minister’s salary to be benchmarked to the median income of the top 1,000 earners who are Singapore citizens, with a 40 per cent discount.

The Government accepted the committee’s proposal. Prime Minister Lee Hsien Loong’s annual salary was slashed to $2.2 million, where it has remained for the last six years.

In 2017, a committee formed by PM Lee to review ministerial salaries recommended that political salaries be adjusted to reflect “annual benchmark movements,” given a 9 per cent rise in benchmark salaries.

Deputy Prime Minister Teo Chee Hean said this year that ministerial pay will remain the same for now and will be reviewed again in five years: “… since the scheme remains valid and the economy is still in transition, we will not change anything now and will maintain the current salary structure and level. We will review the matter again after five years or when it becomes necessary.”

Despite the fact that PM Lee’s pay has not increased over the past six years, he still remains one of the highest paid political leaders in the world. Posts like the one below have been circulating online, highlighting this fact:

Meanwhile, netizens newly responding to high ministerial pay appeared to feel that local political leaders are still “overpaid”: