Wednesday, January 18, 2012

Ministerial Salaries

When this House discussed the issue of Ministerial salaries in 2007, I focused on the technicalities of the old formula, and what I thought was wrong with it.

But I had failed to appreciate a larger issue. Money changes how people look at things. Paying high salaries can be intellectually reasoned, but it affects the relationship between the Government and the people.
Government is not perfect. It has never been, and will never be. We have all, at one time or another, been critical of something the Government did or failed to do. But, as former American President Bill Clinton observed, a successful country needs both an effective government and a good economy. There are no exceptions. In Singapore, we have both. Other government leaders, international institutions and expert commentators agree that Singapore, and what we have achieved, is exceptional. This did not happen by chance. The people of Singapore deserve credit. And so does the Government.
Singaporeans know this, and are appreciative of what the Government has done. But the issue of political salaries has, more than any other, shaped and changed the tone of our national dialogue. When we pay top dollar, we expect top results, and are less forgiving of errors. And so it has become with the way people treat Government. Any mis-step is met with the response that mistakes are unacceptable from highly paid leaders. Things have now become more “transactional”. That emotional connection, that redoubtable bond, which Singaporeans have always had with the Government, and which has been the bedrock of Singapore’s success, is at risk of disappearing.

Will the new formula make a difference? Many Singaporeans have shared their thoughts on the subject, and there are as many opinions as there are people sharing them. But what I find interesting is that very few are willing to state precise figures or formula which they would be comfortable with, let alone one everyone will agree on. I met a group of about 30 bright, young undergraduates recently and asked them what they thought would be a reasonable sum for the PM to receive. Not one of them was able to propose a figure. They all agreed it was very difficult issue. At another discussion I had with working adults, the figure ranged from $500,000 to $3 million. There was no consensus.

Even opposition parties cannot agree on the formula or quantum. Some have declined to go into any specifics, obviously to avoid scrutiny. The Workers’ Party unfortunately has decided to indulge in a game of cat and mouse. NCMP Mr Giam yesterday said that they are not willing to reveal what they or he submitted to Mr Ee’s Committee, saying that it was private. Why? What is there to hide? There are only two inferences: that the Workers’ Party private and public positions are different; or they have changed their position after the Report was issued.

Then NCMP Mr Yee let the cat out of the bag. He made the extra-ordinary assertion that the Workers’ Party held back some proposals so that they could raise them in this debate. He tried to explain that today by saying that the Workers’ Party were still researching the issue and shared what they had. But that is not what he said yesterday. He said: “We do not feel that we have to give everything to the Committee and this is precisely what Parliament is for.” And later he said: “I believe Parliament is where we come up with another proposal to be decided upon.” So it is clear what the Workers’ Party is doing.

The point of this whole exercise was for the Committee to consider all ideas, and to propose what it considers the best one for Singapore. That is how I believe every Singaporean understood it. But the Workers’ Party decided to play politics. They held back what they considered to be meaningful proposals, so that they could come to this House and announce to Singaporeans that they have better ideas. In short, they put their Party’s interests before Singapore’s interests.

But playing politics is their prerogative. Playing games and fence sitting are the privileges of the opposition. Politics is about making decisions, and the Government has one to make.

Common Principles

Despite the many different arguments, I believe there is much common ground between Singaporeans on this issue, which is often ignored. I would like to talk about matters I think we can all agree on.

First, we can all agree that the Prime Minister and the Ministers have very important and difficult jobs. They affect almost every aspect of our lives. In fact, is there any other job which has a greater impact on the success of Singapore, and the well being of Singaporeans?

Second, we can all agree that we want first class public services. When the Former Chairman of the US Federal Reserve, Dr Paul Volker was in Singapore last year, he was asked what he thought of our policy on salaries. Dr Volker is a highly respected economist. He has been a public servant almost all his life. When introducing him to the audience, Dr Kishore Mahbubhani made the point that Dr Volker was content to earn a modest civil servant’s salary, although he could have earned much more in the private sector. That was why he was asked the question, and I expected him to talk about the privilege of service. He did not. Dr Volker’s response to the question was simple and astute. He said it was a good idea to pay public servants well as it was important to ensure good public services. He cited the US Government’s response to Hurricane Katrina and the BP disaster in the Gulf of Mexico as evidence that US public services were seriously lacking. In short, in his view, you need good, capable people to provide good services, and you should pay good people well. The logic is irrefutable.

Third, we can agree that not every capable person wants a life in politics. I dare say most do not. There are very good reasons for this, not the least of which is effect on their families. While we do not have an intrusive media, there is still a considerable loss of privacy, and a significant impact on personal lives. That includes having your spouses and children being openly discussed and their conduct scrutinised. Who wants that? Many will feel, quite understandably, that this is too high a price, whatever the pay.

Fourth, we can also agree that we do not want to set salaries so high as to make money the sole or main reason for seeking office. At the same time, we do not want it to be so low as to become a disincentive. NCMP Yee says we are fishing for talent in too small a pond. But if you create financial obstacles for good, capable people who are willing to step forward to serve, you are only making your pool smaller. No one wants to do that. Everyone wants to make public service open to all Singaporeans. Paying less does not make it more open, but more closed.


Now we come to the nub: what should you pay capable people who perform critical jobs? This brings us to the other “s” word, which tends to dominate this debate: Sacrifice. It has been said that public service is a privilege, and not a sacrifice. Again, no one disputes that, but that is not the argument. The argument is that leaders should make sacrifices because it demonstrates that they care about what they are doing. That is another thing we can all agree on – we want our leaders to care about Singapore. But why look at sacrifice only in money terms?

I think we are asking ourselves the wrong question. It is not how much our leaders should sacrifice, but we want from them. I don’t want someone who tells me that his best quality is that he loves his country or that money is not important to him. Because these are the easiest things to say, and there will be no shortage of people who will say them to get approval.

What do I want from our leaders? I don’t want them just to be smart and capable: I want them to be the smartest, most capable people in the room. I want them to be fair minded, hard working, compassionate and of unimpeachable character. I want leaders who will not be satisfied until every Singaporean has a home and the means to a better life. I want to know that if there is outbreak of a deadly disease like SARS, or a terrorist bomb goes off, or Singapore faces an economic crisis, we have leaders who have the courage, intelligence, experience and determination to do what is necessary for the good of Singapore and Singaporeans. I want leaders who understand that their job involves a sacred trust; a vow to devote every fibre, every moment, every thought, every everything, in service to our country. That is the true sacrifice I think every Singaporean should demand. If we get the quality of people right, the question of quantity of pay answers itself. I believe most Singaporeans will agree with that.

The New Formula

That leads to one more thing we can all agree on: it is impossible to answer the question of salaries in a manner which will satisfy everyone. Many have said so in this House. Even the Worker’s Party agrees that there is no right or wrong figure. I would however like to make two suggestions.

I suggest the proposed formula be tweaked to cap the salaries for the Government’s term of office, with an annual increment for inflation. In other words, salaries will not rise if the benchmark median salary rises. This would create more certainty and more importantly, put paid to arguments that the Government will pursue policies to favour the top earners to increase its own pay.

I also ask the Government to do more to keep Singaporeans informed and engaged on this issue. There is still much misunderstanding over salaries, and you cannot have a proper dialogue if people are working off different facts. For example, many Singaporeans still believe MPs will receive pensions, although that was discontinued years ago. Some even believe MP and Ministers’ salaries are tax free. They are not. Within days of the release of the Report, Mr Gerard Ee had to say publicly that some had mis-understood what it said. Despite the enormous publicity on the subject, some are still unclear about the details of the new package. Although some would prefer that we not keep raising this issue, I support the proposal for the formula be reviewed every five years. I believe we should welcome every opportunity to debate it so that there will be a wider and better understanding of the facts and the arguments. It will also help if we publish annually and in clear terms the average pay package of Ministers, so that we can demolish mischievous allegations that Ministers will secretly earn more through discretionary and undeclared payments. This is fertile ground for those who seek to breed discontent and cynicism. Let us not give them the opportunity to mislead and divide Singaporeans.

Conclusion – an exceptional Singapore

I end with a final proposition we can agree on. We want Singapore to remain an exceptional nation, for that really is the only thing that keeps us relevant. This exceptionalism should not only be in the performance of our economy or the efficiency of our public services. It should also be in the trust and the relationship between the Government and the people it serves. All around the world, politics and politicians are viewed with great cynicism. Cynicism weakens the government; it weakens democracy and it weakens our country. We cannot afford to let that happen to us.

I therefore support the revision of salaries. The new formula is more relevant and intuitive. It deals with some of the criticisms of the old formula and does away with inequities such as pensions. A 30+ % cut is on any view significant. The National Bonus better reflects performance. Even the Workers’ Party agrees with a monthly wage of $55,000/mth. And as Mr Vikram Nair pointed out yesterday, even the difference in bonus computations may not amount to something substantially different.

So we now have a sound basis for the Government to move forward: strengthen connections with Singaporeans, focus on the difficult problems we all know are around the corner, and deliver on its promise for a better life for all Singaporeans. Because in the final analysis, that is all that really counts. I think we can all agree on that.


  1. "I suggest the proposed formula be tweaked to cap the salaries for the Government’s term of office, with an annual increment for inflation. "
    And how is it your suggestion was not brought up in parliament when you had the opportunity?

    1. "Unknown" - You are reading Hri's speech in Parliament. That means he IS bringing it up in Parliament, dude. Chill.

  2. /// A 30+ % cut is on any view significant.///

    That is if you compared it to the exceptional year of 2011. Compared to the ministerial salaries before 1994, it will be a few hundred % higher, even after the cut. Even as so now, how many suffer pay cut when they become minister. What was BG Tan and MG Chan's salary in the SAF? What was TPL's salary from the private sector?

    1. "The". I don't understand. TPL is not a minister. Why do you bring her up? Anyway, do you agree with Worker's Party's proposal? Because it comes to about the same figure ($55k per month versus $60k per month), and it works out to a 30% cut too.