Expats should be paid a sufficient amount to make it worthwhile for them, otherwise why come ? This could even be less than the locals (ie contracts in Japan) as long as enough suitable people apply. Is the package on offer enough to compensate for the inconvenience and extra expense incured, as well as the insecurity of a fixed term employment period.
However, as Singapore has developed the 'expat premium' has decreased for many occupations. Companies simply do not need to pay over the odds for a pleasant location, where as if it was Riyadh or Lagos .......
Actually King on a Wing may well have spent $150 000 on an average car if he bought many years ago, prices now have come down to 'only' 2-3 times USA/Europe/Australia levels. I bought a 4 year old Hyundai for only 50% more than a new one would have cost me where I came from.
Lower income tax rates more than compensate though.
I do remember the rents going ballistic in 2007, fortunately I had just signed a 2 year lease. Many people I knew faced 40 - 80% increases on renewal.
SQ may have over reacted this time and could find themselves short when things pick up again.