Taken globally, they rank 27th in a study by management consultancy Hay Group, which calculated spending power by taking into account salaries, cost of living and taxes.

Last year, Singapore managers ranked fourth in Asia and 22nd in the world in terms of spending power. But Hay Group said the comparison to this year's figures may not be suitable as it has changed the way it calculates the cost of living.

One reason Singapore managers have lower spending power than their counterparts in economies like Hong Kong is that taxes here are higher, said KPMG executive director Ooi Boon Jin.

He said Singapore's highest tax rate of 20 per cent has remained unchanged for a number of years. Compared to Hong Kong, where the highest tax rate is now 15 per cent, higher wage earners in Singapore - such as managers - would have a relatively lower income after tax.

Still, Singapore managers are better off than those in many other Asian countries this year, in part because of the generous recession cushions provided by the Government, said the report.

But in the coming years, countries where governments have increased spending to help companies weather the crisis may impose higher taxes and raise the cost of living for managers, said Hay Group managing director Philip Spriet.

Yesterday's study findings also showed that the income gap between managers and clerical staff has widened slightly over the past three years.

In 2006, Singapore managers earned 4.9 times what their lower-paid clerical staff made. This gap dropped in 2007 to 4.7 times but grew this year to five times.
Still, the pay gap is much smaller and more stable in Singapore than in most other Asian economies, said Mr Victor Chan, Hay Group Singapore's country manager for reward information services.

Developing economies have much larger income gaps, with China leading the way: Its managers earn 12.6 times the pay of clerical staff, according to the report. This gap has also grown significantly over the years: In 2006, it was 10.5 times.

At the other end of the spectrum are Japan and South Korea. Japanese managers earn just 3.4 times what their clerical staff do, while the figure for South Korea is 4.1 times.

The Government's steps to help the lower-income are among the reasons Singapore's income gap has not ballooned, said Mr Chan. 'Not only have proactive measures like the Jobs Credit scheme helped save jobs this year, they have also helped limit the pay gap in Singapore.'

Singapore's relatively small income gap compared with that of others in the region such as Hong Kong, India, Indonesia and Thailand, indicates the lower-level staff here are skilled and educated, he said.

But he cautioned that these aid measures are short-term ones. Lower-level staff should continue to upgrade their skills to attract higher pay, as a large disparity in skills between managers and clerical staff will lead to a widening pay gap.

Other observers noted that Singapore's income gap is still inching up.

'The study does indicate the creeping upward trend of the income gap even within the category of white-collar employees in Singapore,' said Assistant Professor Eugene Tan, a law lecturer at Singapore Management University.

While the recession has hurt employees across the board, the lower-income group is likely to have been most affected, said Citi economist Kit Wei Zheng.

'We've seen high-profile cases of companies' senior managers taking big pay cuts, but my suspicion is that the rank and file took bigger pay cuts,' he said.

But the schemes to help the lower-income group, coupled with the Budget aid measures and a competitive tax structure, have helped ensure the increase in the pay gap stays small, said Asst Prof Tan.
The spending power of Singapore's managers was outstripped this year by that of managers in the Middle East and developing countries, said the report.
Middle Eastern countries have high salaries and low taxes, while fast-growing countries like Turkey, South Africa and Chile are becoming hot spots for senior talent.

This article was first published in The Straits Times