Sunday 22 January 2012

Ministerial Salaries Review debate in Parliament - Day 2

Right pay will help ensure quality leaders in future: PM Lee
Singapore can't stake future on assumption that pay doesn't matter
By Li Xueying, The Straits Times, 18 Jan 2012

THE Prime Minister yesterday sought Singaporeans' support for the new ministerial pay proposals, saying Singapore could not stake its future on the assumption that salaries do not matter in getting the best people to lead.

Getting the pay system right was vital, he said, and it was not only about how much money ministers would get.

Rather, it was about ensuring that Singapore would always have a good government with leaders who care, with the abilities to shoulder the necessary responsibilities, the character to handle pressure, and the mettle to provide steady leadership in a crisis.

'And if we can get that right, then we can protect what we have achieved and build better lives for all,' he said. 'If not, the little red dot will become the black spot.'

He said his bigger concern was for future Cabinets.

He asked: 'Can a future PM continue to get the best and most committed people to serve as his ministers? In fact, can we get the best possible future PM for Singapore? How can our pay system support this important goal? And if we have a pay system which supports this, how can we get Singaporeans to accept that?'

Given Singapore's circumstances, he said, 'our survival and success will always be based on our ability to be extraordinary'.

Speaking during the ongoing parliamentary debate on the recommendations of the Committee to Review Ministerial Salaries, he said he respected the view that a sense of public spirit alone was enough to drive capable and committed people to step forward, bigger pay cuts notwithstanding.

But 'though in our hearts we would wish and hope that that were true, in reality we know it's not so simple', he said. 'Our own experience and the experience in other political systems provide a reality check.'

He acknowledged there would always be some able Singaporeans willing to serve regardless of the terms.

'But will there be enough of them to produce a whole team of ministers, a whole Cabinet equal to the task and with the standards which we have come to expect?' he asked. 'Paying people correctly is part of that answer - not the whole part but part of the answer.'

Framing the issue as one pitting the idealistic against the pragmatic, he called the committee's report 'well-judged'.

In his 75-minute speech, Mr Lee went beyond technical details to spell out the high stakes in establishing a ministerial pay system that worked for Singapore.

He drew on lessons from other countries as well as his own experience - first as a young MP, then Deputy Prime Minister, and now Prime Minister - in three decades of debate over the 'very difficult and very emotional' issue.

PM admits it's hard to recruit talent from private sector

Recalling the 1985 parliamentary debate that saw then PM Lee Kuan Yew in a face-off with opposition MPs, he said with a smile: 'Even (former) MM (Minister Mentor), after three hours of a bravura performance, couldn't settle the matter permanently.'

And so, many Singaporeans continue to harbour reservations over the issue. 'All this came to a head in the general election in 2011.'

Mr Lee did not believe that salaries were a make-or-break issue for his Cabinet but added he had 'no doubt proper salaries have made it easier for me to build the team which I have today and to provide the best service which we can to Singaporeans in governing the country'.

Yet, others had turned him down. Even if they were not worrying about themselves, they must have considered the financial impact on their families.

Referring to a controversial Facebook post by Minister of State Grace Fu, he added: 'Grace Fu was completely right on this point when she posted to say that this salary revision is okay but if you go too far I think that's going to be a problem for many Singaporeans. She got flamed online but she was right, and she was honest to point this out.'

Some have cited Workers' Party (WP) MP Chen Show Mao as someone willing to enter politics without the compensation. But Mr Lee noted that Mr Chen joined at age 50, after a successful career as a lawyer. 'Now he is ready to do public service.'

But it cannot be that the entire Cabinet comprises people in their 50s, he said. 'We want people who are younger, vigorous, for whom this is not just something you do after you've done other things in your life but the main commitment for the prime years of your working life.'

It also could not be that only wealthy Singaporeans - who could afford the financial sacrifice - took the plunge.

Mr Lee said he was already not as successful in persuading private sector talents compared to those from the public sector. Among the factors: civil service pay, while competitive, is not quite as high as private sector pay. He said ruefully: 'I wish I could find more of them.'

Mr Lee also said he was 'encouraged' that the WP had also accepted the committee's principles - salaries should be competitive; reflect a public service ethos; and be based on a clean wage system. And though it proposes a different formula, the amount is in the same ballpark - 'but of course slightly lower because having looked at the committee's report, they decided that as the opposition party, surely they must recommend something a bit less'.

Underscoring the contentious nature of the topic, Mr Lee said he does not expect his speech to be the last word on ministerial salaries. 'But it is my responsibility as PM to tackle this very difficult issue, to find and prepare the best possible team of ministers... and the best next team to take Singapore forward.

'To do that it's not just a matter of drinking more tea or meeting more people but putting in place the right system... the pay structure to help the next team succeed and to find more people.'

Deputy Prime Minister Teo Chee Hean is expected to wrap up the three-day debate today.

Most ministers draw entry-grade pay
By Rachel Chang, The Straits Times, 18 Jan 2012

PRIME Minister Lee Hsien Loong revealed yesterday that most of the ministers in his 15-member Cabinet are on the MR4 pay scale, the entry grade for a minister.

Ten ministers are at that grade, he told Parliament.

Under the revised benchmark proposed by the Committee to Review Ministerial Salaries, a minister at MR4 will receive from $935,000 to $1.21 million in total remuneration, assuming a 20-month pay package.

Only one minister is at the higher MR3 grade, which means a total of $1,188,000 to $1,452,000. Mr Lee did not name the minister.

Deputy Prime Ministers Teo Chee Hean and Tharman Shanmugaratnam receive from $1,683,000 to $2,057,000.

Mr Lee said nearly all ministers are at MR4 because the Cabinet is still new, in transition and still settling in.

Appointed after last year's General Election, it includes two ministers - Education Minister Heng Swee Keat and Acting Minister for Community Development, Youth and Sports Chan Chun Sing - in their first political term.

The Prime Minister decides ministers' pay grades and their individual performance bonuses, which can go up to six months.

Mr Lee said he expects to promote more ministers to higher grades once the Cabinet has reached a 'steady state'.

There will then be three tiers across different pay grades: Newer ministers being developed for heavier responsibilities; experienced ones overseeing major ministries or areas of work; and senior ministers helping the Prime Minister coordinate more than one ministry and oversee whole-of-Government issues.

Deferred or preset bonuses won't work: PM

While there is a hierarchy in Cabinet, he said, 'together, we are a team'. This doctrine of collective responsibility was why he rejected suggestions to have ministers' pay held to individual key performance targets.

He said it was his duty to set objectives for ministers and assess them, but he had to take into account not only a minister's main portfolio, but also his broader contributions which were multi-dimensional and sometimes intangible.

For example, building up the Singapore Armed Forces and the Home Team was the work of more than one generation. So a good outcome at any one time may be due also to the minister's predecessor.

The Education Minister's job was not just to provide school and university places today, but to also build an education system that would prepare students to work in the economy of the future.

So he dismissed a Workers' Party proposal to defer a portion of ministers' bonuses till the end of a term of government, rather than pay every year.

'When will I know that our ministers have done a good job? When today's 15-year-olds are 55. So if you talk about deferred bonus, I would have to defer Heng Swee Keat's bonus for 40 years,' PM Lee said with a laugh.

A preset formula to fix a minister's bonus would also fall flat because 'a good minister doesn't just fulfil what the PM tells him to do', said Mr Lee.

'A good and entrepreneurial minister expands the scope of his responsibilities, imagines things which he could do and embarks on projects which nobody asks him to.'

Mr Lee also gave a glimpse of how he held ministers to account.

He has not had to sack a minister - a move which would be warranted for someone negligent or dishonest - but if someone did not perform well despite best efforts, he would be moved to 'less demanding portfolios'.

'If necessary, I may have to phase him out discreetly,' he said, adding that exits were delicate matters and ministers too were deserving of dignity and decorum.

'You cannot turn this into a public spectacle and have it deter more good people from entering politics,' he said.

'Foreign leaders often privately admit to us that they wish they could have followed us. Unfortunately, their politics does not allow them to.' - PM Lee
By Rachel Chang, The Straits Times, 18 Jan 2012

SINGAPORE has deliberately avoided following other countries' approaches to determining political pay, said Prime Minister Lee Hsien Loong yesterday. And in so doing, it has avoided many of their problems.

In using political pay systems with hidden perks and no link to the private sector, other countries are plagued with financial scandals, frequent political resignations and unstable governments, he said in Parliament.

Speaking on the second day of debate over a new benchmark to derive political pay, Mr Lee reiterated the Government's reluctance to follow the way other governments set pay, and said that it is actually Singapore that foreign leaders want to emulate.

'Foreign leaders often privately admit to us that they wish they could have followed us. Unfortunately, their politics does not allow them to.'

In countries where official pay is low, but hidden perks and post-politics earning potential is high, negative side-effects abound.

In the United States, there is a 'revolving door system' between the public and private sectors for politicians and government officials, he said.

People serve for a short while in government, then leave for the private sector to become lobbyists and consultants on the very policies they passed while in office.

In Britain, MPs justify expenses like housing allowances because they must maintain a residence in London to attend Parliament.

Mr Lee had his own take on the rationale, saying: 'That's the explanation. The reality is they're given these benefits because they could not be given the pay.

'This is just a way to work the system so that you can be paid what you really truly need to be paid.'

He also pointed out that British MPs took this literally, exploiting their claims system until a 2009 scandal put an end to it.

He said: 'They submitted claims for maintaining their swans in their pond, for cleaning up the moat of their castle. Somebody submitted a claim because he was watching some exciting movie in his home.'

He was referring to the case of former home secretary Jacqui Smith, who claimed as an expense her broadband and television package - including two pornographic movies her husband had purchased.

'So other countries are different,' he summed up. 'We have deliberately not followed that model (and) I think we should not follow that model.'

Singapore's way, he argued, has served it well. Good government is not just critical in the country's 'take-off phase', he said, adding that 'Singapore must not go on autopilot'.

Japan, where a dysfunctional political leadership hamstrings a top civil service, has gone down this route.

'Governing a country is not a matter for technocrats,' said Mr Lee. 'It's a matter for political leaders who will decide, who will persuade, who will carry the ground, set the direction and make things happen.'

Singapore will become a mediocre country if this happens to it, he said, and Singaporeans will no longer be able to reap a 'Singapore dividend'.

By virtue of being citizens of this 'exceptional' country, Singaporeans have gone up in value: 'You're in demand, people want to hire you. Opportunities are open. When you go places, your standing is there.'

He told the House about a meeting he had with a young Singaporean at an Asia-Pacific Economic Cooperation meeting in Honolulu last year, who told him that she had never before realised how high Singapore's standing was in international circles.

'I can't send all our bright young students to Honolulu,' he concluded. 'But I think we need to know that, while we have reasons to be dissatisfied and to want to do better, in fact, we have not done badly. And we should be careful not to lose what we have already gained.'

Ministers faced 'very tough decisions' to join politics
They had to leave successful careers for uncertain prospects: PM
By Tessa Wong, The Straits Times, 18 Jan 2012

THE current Cabinet is made up of former private sector talent and former civil servants, and both groups had to make 'very tough decisions' when asked to join politics, said Prime Minister Lee Hsien Loong yesterday.

He was speaking in Parliament during the debate on the recommendations by the committee tasked to review ministerial salaries.

Before joining, these ministers had to consider ending successful careers for uncertain prospects in politics.

Those in the private sector would have been approached while they were making good progress in their careers, and they could not be so certain of similar future success as ministers.

'You come in, you may succeed, you may fail,' noted PM Lee, adding later that for those who come from the public sector, they too would also have to give up the prospect of rising high in the civil service or army.

Ministers who came from the private sector include former top lawyer K. Shanmugam, who is now the Law and Foreign Minister; Defence Minister Ng Eng Hen who was a surgeon; and Health Minister Gan Kim Yong, a former administrative officer who was the chief executive officer and president of NatSteel before becoming a minister.

Former public servants include Education Minister Heng Swee Keat, who was the managing director of the Monetary Authority of Singapore (MAS) and before that the Permanent Secretary for the Ministry of Trade and Industry (MTI); and Deputy Prime Minister Teo Chee Hean who was chief of the navy.

Once they joined politics, there was no turning back, pointed out PM Lee.

'You cannot go back to the private sector and rejoin your profession. Five years later or 10 years later, you're not as young. Five more years of bright young people have come along, filled up the places... So it's an irrevocable change of course,' said PM Lee.

It is also a 'one-way ticket' for those from the public sector, because they have to resign from public service.

Some do not become ministers straightaway, so they have to immediately find jobs outside of government. Those who do not succeed as a minister will also have to start afresh in the private sector.

It would be more difficult for someone from the private sector to adjust to being a minister, noted PM Lee, as they would need different aptitudes and skills.

Former civil servants would be more familiar with policy work and ministerial duties, as they would have dealt with ministers in the past.

But even they face no assurance of success, as writing policy papers for a minister is different from defending a policy in Parliament, noted PM Lee.

And while civil service pay is not as high as private sector pay, former public servants still face hefty pay cuts.

For example, Mr Heng took a substantial cut when he entered politics last May, and he will face a further reduction with the recommendations.

Mr Lee also noted that Mr Heng would probably have been head of the civil service if he had not entered politics. 'It's a big sacrifice for the civil service to lose a person like him,' he said.

Besides family and privacy considerations, ministers would also have to contend with the pressure of being responsible for the future and welfare of the nation.

'If you are not up to it, several million people are going to suffer the consequences, quite apart from any mortification or embarrassment which you may feel,' he said.

Because of all these considerations, the talent pool for ministers only consists of a few dozen, and 'finally when they boil it down in each election we've never brought in more than six or seven'.

PM Lee said he had never discussed salaries with potential candidates, because if money had been their principal consideration, he would not have even fielded them as MPs, much less appointed them as ministers.

He added: 'I don't believe that salaries were a make-or-break issue for any of them who have come in, but I have no doubt that proper salaries have made it easier for me to build the team which I have today and to provide the best service which we can to Singaporeans to govern the country.'

PM Lee recalls wrestling over pay issues since 1980s
By Andrea Ong, The Straits Times, 18 Jan 2012

MR LEE Hsien Loong was a young colonel in the Singapore Armed Forces (SAF) when he first took part in a pay review for soldiers.

That was back in the early 1980s and Mr Lee, then an Administrative Service officer seconded to the military, would have been about 30 years old. Emeritus Senior Minister Goh Chok Tong was then Defence Minister.

The Government had been planning a 'major increase of salaries', which worked out to a 20 to 25 per cent raise for military officers.

PM Lee yesterday told the House of the role he played in arguing against the pay increase.

'We discussed it... I argued against it because I thought it was too much, too fast. There was no need to be so generous and perhaps to change the spirit of the service,' he said.

His perspective, however, has changed over the years, he added.

While he did not specify the year this took place, there was a major revision of civil service salaries in 1982. As a result, the starting pay of military officers with degrees shot up by 51 to 98 per cent.

That was Mr Lee's first brush with the thorny issue of pay. It would not be his last.

After he entered politics in 1984, he watched as his father, then Prime Minister Lee Kuan Yew, 'argued and defended the policy of paying realistic wages to ministers' in Parliament.

One particular Committee of Supply debate in March 1985 - just three months after the younger Mr Lee had been elected as Member of Parliament for Teck Ghee - stood out in his memory.

The elder Mr Lee 'came with a stack of papers and did battle', recalled PM Lee of the mammoth session which saw a face-off between Singapore's founding Prime Minister and Workers' Party MP J.B. Jeyaretnam.

'He never looked at the papers but for three hours, he argued, explained, made the case with Jeyaretnam, with Chiam See Tong, with several other MPs participating, in a way which only (Mr Lee) can do,' said PM Lee.

The elder Mr Lee set out why it was necessary to be realistic about salaries, and for the best people possible to take up top positions in the Government, civil service and judiciary.

'But (Mr Lee), even after three hours of a bravura performance, couldn't settle the matter permanently,' said PM Lee.

'It is not possible. And every few years, we came back to it and each time we had to argue the matter again.'

In 1990, the younger Mr Lee was appointed Deputy Prime Minister and took charge of the civil service. He had to crack his head over the problem of a brain drain of young officers because civil service pay was lagging behind that in the private sector.

It was a serious problem which called for a 'major revision', PM Lee said.

Even after the revision in 1993, the problem of having to 'move drastically' on pay and promotions to chase after the private sector would not go away.

This was why the Government introduced a landmark White Paper in 1994 which proposed formulas to peg the pay of ministers and officers in the elite Administrative Service, to top private sector incomes.

The formulas removed the need to justify pay revisions every few years as salaries would just follow the benchmark. 'If it goes up, we go up. If it goes down, we go down,' said PM Lee.

The 1994 formula for ministers set a junior minister's pay at two-thirds the average principal income of the top four earners in six professions.

The formula was modified in 2000 to two-thirds of the median income of the top eight earners in six professions.

Other revisions have been made over the years to adapt to changing times.

PM Lee noted that the principle of benchmarking pay to the private sector applies to not just ministers and the Administrative Service but the rest of the civil service and the military as well.

This system helps match their wages with the private sector - 'but always lagging a little bit because we don't want to set the pace', he said.

Had the wages not been kept competitive, 'we would not have the civil service we have today', he added.

Looking ahead to the future, PM Lee said the process is 'never over' as the civil service must continue to move with the private sector. He singled out three professions - Legal Service officers, doctors and nurses - where public sector pay faces particular pressure from the private sector.

'In the same way, ministerial pay also has to remain competitive and realistic as circumstances change,' he added.

Finally, beyond the current debate over the proposals of the Committee to Review Ministerial Salaries, PM Lee also has the next generation on his mind. The pay system must be right, so it will help, rather than hinder, the Government's efforts to bring in good future leaders who are passionate, committed, and have the right values.

Said PM Lee: 'I don't expect this speech to be the last word on ministerial salaries but it is my responsibility as PM to tackle this very difficult issue, to find and prepare the best possible team of ministers for Singapore and the best next team to take Singapore forward.'

ESM Goh 'serving the country without collecting any salary'
By Teo Wan Gek, The Straits Times, 18 Jan 2012

BACKBENCHER Lim Biow Chuan (Mountbatten SMC) yesterday held up Emeritus Senior Minister Goh Chok Tong as an example of the kind of political leader Singaporeans can be proud of.

This is because he continues to serve the country, travelling and promoting Singapore without collecting any salary as a Cabinet minister, said Mr Lim.

Mr Goh, who stepped down from Cabinet along with former Minister Mentor Lee Kuan Yew after last year's General Election, was given the honorary title of Emeritus Senior Minister. Since then, he has travelled extensively, meeting leaders of various countries including China, Japan, India and Saudi Arabia.

In his speech, Mr Lim also noted the personal sacrifices of ministers who gave up large pay packages in the private sector to join the Government.

He highlighted Dr Ng Eng Hen, a surgeon, the late Dr Balaji Sadasivan, a neurosurgeon, Mr Gan Kim Yong from NatSteel, and Ms Grace Fu from PSA.

They decided that the 'privilege of serving the country was a higher calling than to continue their pursuit of material success in their individual chosen fields', said Mr Lim.

He added: 'Such is the ethos of the current Cabinet ministers and I believe that Singaporeans can be proud of the fact that our political leaders do make sacrifices to answer the call of duty, to make a difference to the lives of other Singaporeans.'

MPs direct attention to Government's key task
By Teo Wan Gek, The Straits Times, 18 Jan 2012

THREE MPs yesterday sought to refocus attention on what they said is the real business of the Government - taking care of people.

They hope the heat of debate on ministers' pay will not detract from that focus.

Mr Alex Yam (Chua Chu Kang GRC) pointed out that while it is important politically for the House to discuss the sensitive issue of ministerial salaries, it is equally if not more important to hunker down and plan for improvements in workers' lives.

'While a reduction of political salaries and allowances is a significant move, let us not forget that Singaporeans expect members of this House to continue to focus on their interests and their daily lives in a bleak global economy,' he said.

Mr Yam said he would rather the House discuss its pledge in last year's Budget statement to raise the median income of Singaporeans to $3,100 by 2020, which is a 30 per cent real wage increase in 10 years.

At his Meet-the-People Session, he had met a woman who is raising a family of five on a take-home pay of $760. Helping Singaporeans like her is to him 'the real challenge of this House', he added.

Minister of State for Community Development, Youth and Sports Halimah Yacob said her biggest fear is that the debate on ministers' pay, if not carefully managed, would erode people's trust in the Government's leadership.

'This can only be detrimental to Singapore, regardless of which party we belong to. Worse still, it will deter good people from entering politics regardless of the pay that is offered to them,' she said.

She used a Malay proverb to describe how she saw a good Government, as 'like a big piece of wood in the middle of the field, providing shelter from the sun, and protection from the rain'.

That proverb, she said, 'encapsulates very nicely all that citizens expect from their government and the outcomes and deliverables that a good government should strive for'.

A good government is only as good as the people that comprise it, she added.

'In the heat of this debate, I hope that we do not lose sight of this human angle - that we are talking about individuals who have decided to come forward to serve and to put the interest of the people above their own, sometimes at a cost to themselves.

'My fear is that if we turn this debate into a mechanical discussion about dollars and cents, it will become much harder for us to attract good people as office-bearers. For who would want to hold office only to have their motives and intentions questioned all the time, when they are putting their heart and soul into the work that they do purely because of the convictions that they hold.'

She also urged Singaporeans to look at the ways in which the Government had improved their welfare over the years.

She highlighted a recent Ministry of Finance study on social mobility, which showed that children from poor Singaporean families stand a good chance of moving up in life.

She also noted plans by the Education Ministry to help students studying in private educational institutions pay for their university education.

'Such efforts require leaders in public service with vision and foresight as education is a long-term investment, and we need to attract more of such people into public office,' she said.

Mr Zainal Sapari (Pasir Ris-Punggol GRC) chose to highlight the plight of low-income Singaporeans. He called for greater weightage to be given to real wage growth of the bottom fifth of Singaporean earners, in the National Bonus component of ministers' pay.

He proposed a weightage of 40 per cent, up from the 25 per cent proposed by the Committee to Review Ministerial Salaries.

He said: 'This is important as it will signal a greater need for emphasis to be placed on increasing the income of those at the lowest 20th percentile of working Singaporeans as these people are the ones most in need of income growth.

'It will send a clear message that we are a caring government which places low-wage workers at the top of our agenda.'

WP proposes publishing total pay of political leaders annually
This would be in line with principle of transparency: Yaw
By Janice Heng, The Straits Times, 18 Jan 2012

THE total pay of political leaders should be published every year, and the amount of National Bonus disclosed, says the Workers' Party (WP).

This would be in line with the principle of transparency, WP MP Yaw Shin Leong (Hougang) said in Parliament yesterday during the debate on the recommendations of the Committee to Review Ministerial Salaries.

Publishing the salaries of political office-holders would stop the spread of misinformation, keep politicians accountable for their entire term of office, and let Singaporeans see how their leaders' pay varies with the country's performance, he added.

This was one of three proposals which the WP feels will enhance 'the twin towers of accountability and transparency'.

The other two are:

- Form an independent commission each time the Prime Minister seeks to change how political pay is determined;

- Make the findings of such a commission subject to debate in Parliament, and to parliamentary approval.

'Only with transparency and meaningful information available can Singaporeans be - and remain - convinced that changes to the pay of our political leaders are not undertaken solely to advance their material interests,' said Mr Yaw.

He noted that MPs have expressed support for the principle of transparency during the ministerial pay debate that began on Monday. So did the Committee to Review Ministerial Salaries.

But the principle will be reinforced, he said, by the WP's three proposals.

The review committee has already recommended the formation of an independent committee every five years.

But the WP wants this taken further, said Mr Yaw. The committee 'must be accountable to and take directions from Parliament'.

He cited examples from three other Westminster systems: Australia, Canada and Britain. All have independent bodies for political pay, with their findings subject to parliamentary oversight.

Subjecting political pay to public scrutiny via the legislative process will 'enhance public trust in the procedural rigour of determining political pay', he said.

This is not the same as seeking public feedback before the review committee's report is published, he added.

As for publishing political leaders' pay, Mr Yaw noted that information on political salaries and allowances is available in Australia, Canada and Britain.

Regardless of how these countries decide political pay, they have stringent disclosure rules on the use of taxpayer funds for paying political leaders, he said.

Singapore should hold itself up to this level of transparency, he added.

In his speech, Mr Yaw also compared how the benchmarks proposed by the review committee and the WP would affect political salaries.

The committee recommends pegging an entry- level minister's pay to the median income - the midpoint in a range - of the top 1,000 Singaporean earners, with a 40 per cent discount.

The question of how this would affect future salaries had earlier been raised by Singapore People's Party Non-Constituency MP Lina Chiam.

She noted that the new formula may result in a large cut now but a higher base pay in the future, if the median pay of the top 1,000 earners rises substantially.

The WP estimates the committee's proposed benchmark will see pay going up by 51 per cent by 2020, said Mr Yaw. The WP's formula results in a 41 per cent rise.

He did not explain how the WP arrived at its estimate. But the comparison was pounced on by People's Action Party MP Vikram Nair (Sembawang GRC), who claimed the WP's benchmark would result in higher future salaries.

Mr Nair noted that a rise of 41 per cent from the WP's proposed $55,000 monthly pay would result in a salary of $77,550.

A rise of 50 per cent from $46,750 - the lowest starting salary proposed by the committee - would yield $70,125.

The committee's formula thus results in a lower monthly pay, said Mr Nair.

Mr Yaw replied that the figures would be different in the long term. And as the WP recommends a smaller maximum bonus, the annual pay for a minister under its formula could be much smaller.

WP proposals on pay 'not that different'
Suggested benchmark for MP allowances not average wage level: Vikram Nair
By Janice Heng, The Straits Times, 18 Jan 2012

ALTHOUGH the Workers' Party (WP) has sharply criticised the recommendations of the Committee to Review Ministerial Salaries, its own proposals are similar, the People's Action Party's Mr Vikram Nair (Sembawang GRC) charged in Parliament yesterday.

'The Workers' Party has used very strong language to criticise the proposal of the committee, essentially calling it elitist for pegging salaries against the top 1,000 earners,' said Mr Nair.

Yet the WP's recommended pay turned out to be not that different.

Mr Nair said he was reminded of a quarrel in Jonathan Swift's satirical novel, Gulliver's Travels.

Two factions disagreed over which end boiled eggs should be broken on. 'But at the end of the day, what you arrive at is a cracked egg,' he said.

On Monday, the first day of the debate, Mr Nair had observed that the WP's proposed $55,000 monthly salary for an entry-level minister was more than the lowest monthly salary proposed by the committee, of $46,750.

Yesterday, Mr Nair turned on the WP's benchmark itself.

The WP proposes pegging MP allowances to the salary of a senior civil servant at the MX9 pay grade, which it says is aligned to general wage levels.

This is about $11,000 a month. Ministers' salaries will start at five times this amount, or $55,000 a month.

But less than 2 per cent of civil servants fall into the MX9 pay grade, observed Mr Nair. 'So the Workers' Party's starting point is certainly not the average wage level, as they have represented. It is in fact much higher than that.'

He also objected to the WP's comparison of MP allowances to civil service pay.

MPs in other countries have expense accounts, but in Singapore, an MP has to use his allowance to cover his expenses.

'Thinking of the MP's allowance as a salary is perhaps the wrong starting point,' he concluded.

Mr Nair further tackled the WP's objections to the maximum 13-1/2 months' bonus allowed for by the committee.

He calculated that the WP's proposed monthly salary of $55,000 is $8,250 higher than the committee's $46,750 figure.

This is $99,000 more a year - equal to more than a two-month 'bonus', based on the committee's proposed monthly pay.

'While the Workers' Party kicks up a big fuss about the bonus, it is important to keep this in mind, because any bonus they calculate for an entry-level minister will also be based on this higher starting salary,' said Mr Nair.

As for bonuses themselves, he argued that the targets set for the new National Bonus will be difficult to meet, meaning ministers may not receive the maximum six months.

The National Bonus depends on how well targets for four indicators are met.

To get the full six months, real income growth of the average Singaporean and of the lowest 20th percentile of wage-earners must both be above 4 per cent; unemployment must be below 3.5 per cent; and real GDP growth must be at least 7 per cent.

Mr Nair also criticised the WP's past stance. In its 2006 and 2011 manifestos, the WP said salaries should be pegged to those of foreign leaders, taking allowances into account.

But calculating this is 'notoriously difficult,' said Mr Nair, noting that the WP did not provide any estimate of what the salary would be under this approach.

He also expressed surprise that on Monday, WP Non-Constituency MP Gerald Giam opposed the motion to endorse the committee's recommendations.

'Given how much common ground there is between the parties, it is stunning that he would actually want to oppose a motion that in my view is extremely progressive and brings us much closer to the Workers' Party's ideas than anyone has proposed before,' said Mr Nair.

To applause from the front bench, he said he hoped both sides of the House could support the proposal.

In response, WP NCMP Yee Jenn Jong wondered if Mr Nair thought MPs were there 'to rubber-stamp the proposal'.

'I believe that Parliament is where we come up with another proposal to be decided upon,' he said.

In his speech, Mr Yee also responded to Mr Nair's question on whether the WP had shared its ideas with the review committee during its public consultation.

Mr Nair had asked that both yesterday and on Monday.

Mr Yee revealed that Mr Giam had spent more than two hours with the review committee.

In that meeting, Mr Giam shared the WP's ideas of a deferred bonus, key performance indicators for ministries, and their benchmarking method, said Mr Yee.

A debate that won't go away - but has moved on
By Chua Mui Hoong, The Straits Times, 18 Jan 2012

IN 1994, I sat in Parliament listening to former prime minister Lee Kuan Yew explain why Singapore needed to pay its ministers top dollar, and why the proposal to peg ministers' pay to top private sector individuals was necessary.

In 2000, I heard then Prime Minister Goh Chok Tong use hard numbers to argue that a good minister makes a critical difference to Singaporeans' lives. The cost of the Cabinet then was $34 million a year - $11 per citizen.

The price of bad government could have been $9.5 billion, if the economy had shrunk by 5 per cent during the economic crisis, or $3,166 per Singaporean, said Mr Goh. This was during a debate on pay hikes in the public sector, which also doubled from 24 to 48 the number of top earners that ministers' pay was pegged to.

In 2007, ministers' pay was debated again. This time, another PM, Mr Lee Hsien Loong, asked the House and Singaporeans to support pay increases for ministers, as the gap between their pay and top private sector earners had widened. Raising the pay would make it easier for him to seek political talent, he said.

Three bruising debates and three PMs later, the issue of ministers' salaries still sparks heated debate in and out of the House. Among Singaporeans, the issue still has considerable traction in cyberspace and on the cocktail and kopi tiam circuits, eight months after PM Lee announced last May that a committee would be set up to review ministers' pay.

Yesterday's debate in Parliament was no different, with 11 MPs, including the PM, speaking on the motion to endorse the report of the committee to review ministerial salaries. This report proposes pegging ministers' pay to 60 per cent of the median income of the top 1,000 earners. This would cut salaries from current levels by more than one-third.

Listening to round four of the debate on ministers' pay over 18 years gave me both a sense of deja vu and some hope that common ground has been forged.

This issue has dominated public and parliamentary attention so often, the risk of debate fatigue - not just among political columnists - is very real. And yet it should not be, because this issue goes to the heart of just what kind of government Singaporeans want for their country.

Do Singaporeans expect their politicians to be saintly paupers?

Three debates later, I think the answer is 'no'. Even the Workers' Party's (WP) Mr Yee Jenn Jong noted this: 'Singaporeans do not expect politicians to lead a spartan life with a religious calling.'

It was notable that even the alternative formula proposed by the WP - peg salaries to the monthly pay of senior civil servants outside the elite Administrative Service, such as the MX9 grade in the Management Executive Scheme - is justified partly by its alignment to market conditions. As the WP's Mr Muhammad Faisal Abdul Manap (Aljunied GRC) noted, civil service salaries are based on 'general market conditions of the job'. So the WP proposal means political salaries 'will go up and down based on the condition of the market experienced by the people, not based on the 1,000 top earners'.

There is widespread acceptance today of the idea that public sector and political salaries should be pegged to the private sector. Indeed, it bears reminding that it wasn't so long ago that the notion of market-based salaries for the public sector seemed distasteful.

PM Lee himself admitted arguing against raising soldiers' pay by about 20 per cent in the 1980s to keep pace with private sector salaries, because he 'thought it was too much, too fast. There was no need to be so generous and perhaps to change the spirit of the service'.

His perspective, he acknowledged, had changed over the years, especially after he had to persuade people to enter politics. 'I don't believe that salaries was a make-or-break issue for any of them who have come in, but I have no doubt that proper salaries have made it easier for me to build the team which I have today and to provide the best service which we can to Singaporeans to govern the country.'

No one will say pay is an issue, but as PM Lee observed: 'For some of them, it must have been a consideration, especially the younger ones with young families and young children, and when they say, 'I don't mind but my husband is not keen or my wife is not keen', well, we know how to interpret what it means because even if they don't worry for themselves, they must think about the financial impact on their spouse and children.'

In that sense, the debate has moved on beyond philosophy, and Singaporeans accept that political leaders deserve just compensation. Many Singaporeans may admire the founding generation who served the country at great personal peril and considerable financial sacrifice. But that era and that generation are no more.

The debate has even moved beyond the million-dollar figure. The committee's ballpark figure of a monthly salary of $55,000, which works out to a package worth $1.1 million for a good-performing minister, has not drawn as much flak as would have been expected. The WP's own formula would also yield a salary of $55,000 a month, although it proposes a less generous bonus payout: a maximum of five months plus 13 months basic, making for a total of $990,000.

To be sure, there are still grumbles online and in the coffee shops about million-dollar salaries, but among professionals and the middle class, there is growing acceptance of ministerial salaries in that range.

Instead, what is most contentious now is the technical issue of what formula or benchmark is used. Many have criticised it for pegging pay to the top 1,000 earners, saying this is elitist. Even the People's Action Party's own MP, Mr Lim Biow Chuan, suggested removing the peg and using a fixed salary point, to be reviewed by an independent panel every five years.

Whatever formula is eventually adopted, one thing is for sure: The issue of ministerial salaries will continue to draw heated disagreement. The formula will be tweaked again, and a future PM will have to stand up in Parliament to seek the support of MPs and Singaporeans for yet another round of changes.

But if there is less vitriol and more common understanding in each round of the debate, then the exercise is worthwhile. In any case, there is always a new generation to be convinced.

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