Prime minister to accept recommendation that he, his ministers and the city-state’s president accept salary reductions.

Lee will still remain the world’s highest-paid leader even after the proposed salary reduction [Reuters]

Singapore’s prime minister, Lee Hsien Loong, and senior officials from his government will take a huge pay cut after opposition complaints over their high salaries.

However, Lee will still remain the world’s best-paid leader.

The prime minister’s office said on Wednesday that he will accept the recommendations of a government-appointed committee to reduce his salary by 36 per cent, as well as those of his ministers and the city-state’s president.

Lee earns more than $2.3m a year but will have that reduced to $1.7m under the recommendations of a review committee he appointed last year, the panel said on its website.

President Tony Tan faces even tougher times, with a potentially huge 51 per cent salary cut. Still, observers might consider him well-paid at 1.5m Singapore dollars ($1 = 1.2829 Singapore dollars) for a ceremonial post.

Salaries for government ministers will be reduced by 37 per cent to an annual 1.1m Singapore dollars.

Still, public officials in Singapore, with a population of 5.1 million, could be the envy of their peers.

The People’s Action Party (PAP), which has ruled Singapore since independence in 1965, has been on the defensive since its share of votes in the 2011 election fell to 60 per cent, an all-time low, amid rising prices of housing and transport.

Widening income disparity

Among the hottest issues facing the PAP was ministers’ high pay, which the government has justified as necessary to attract talent from the private sector and to deter the corruption that afflicts other Asian countries.

The opposition said linking leaders’ salaries to what they could earn in the private sector meant they only focused on the rich.

“The pegging of the salaries to top earners has led to the PAP to focus on increasing the wealth of the richest in the country while neglecting the poor,” the Singapore Democratic Party (SDP) said in a November proposal.

The opposition party proposed instead that ministers earn a multiple of what the lowest 20 per cent of wage earners get.

According to data from the manpower ministry, income of the bottom 20 per cent of Singaporeans was flat or negative in the past 10 years.

Many Singaporeans complain about rising prices for basics such as housing and transport on the island, which has seen an influx of foreign workers over recent years.

Despite the pay cut, Lee’s salary will still be three times that of Donald Tsang, Hong Kong’s chief executive who is the world’s next highest-paid political leader, taking home about $550,000 a year.

Julia Gillard, the Australian prime minister, will get about $498,200 a year under proposals unveiled recently. Barack Obama, the US president, earns about $400,000 a year.