theonlinecitizen

a community of singaporeans

Ministers’ Salaries – is the government losing touch?

Posted by theonlinecitizen on April 9, 2007

By Leong Sze Hian

I refer to the increase in ministerial pay.

Before the increase, political appointment holders take home $ 46 million in total a year, which is only 0.13 per cent of total Government expenditure, or 0.022 per cent of Singapore’s Gross Domestic Product.

As to not having a sense of proportion in quarreling about $74 million, after the 60 per cent increase by the end of next year after the 3-step salary revision announced in Parliament on April 9, from a proportional perspective, it is 151 per cent of the total amount of donations received by the Community Chest in 2006.

For the 1st to 10th decile of non-retiree households surviving on only $160 average monthly income from work per household member (Department of Statistics’ “Key Household Income Trends 2006), which I estimate to be about 324,000 Singaporeans living in about 90,000 households, this sum can increase their income of $ 160 by 143 per cent to $ 388.

If we take 0.13 per cent of total Government expenditure as a benchmark, the United States and Malaysia would be paying political appointment holders about US $ 3.5 billion (S$ 5.3 billion) and RM 160 million (S$ 70 million) respectively.

As to private sector achievers sacrificing their lucratic salaries to join politics, with no guarantee of success and took a chance, I would like to ask in the history of Singapore, how many political appointees have ever failed so that we may get a sense of the proportion of the guarantee of success and the chances they are taking ?

What is the proportion of political appointees who sacrificed higher paying jobs in the private sector, versus the proportion who may end up with perpetually risk-free higher salaries and pensions in public service ?

“It’s a competitive world in which we live, and if we can’t compete we are not going to live well” – If political appointees live well earning about $ 5,300 a day, I think the 324,000 Singaporeans living on $ 160 a month may need a lift in their living too.

Describing political leaders who should be ready to sacrifice for the good of the people as an admirable sentiment, – may I suggest that a poll be conducted among all political appointees to gauge the proportion that needs more pay in order to sacrifice for the good of the people ?

The eyes of the world may be on Singapore, as we debate whether a person who earns $ 5,300 a day, may in a sense, be losing touch with those who may be at the other end of the spectrum of Singapore’s 105th ranking in the world for income equality, and 130th out of 178 countries for Happiness.

Our daughters and mothers may not be maids in other countries, but some of our elderly fathers and mothers are working as cleaners in food courts or collecting empty drink cans, earning about $ 600 a month.

I know of some Singaporeans who have worked as maids, By the way, what’s wrong with being a maid as they provide a valuable service, doing an honest job for a decent living?

A maid in Canada is paid about C$ 2,000 (S$ 2,600) and Hong Kong’s minimum wage for maids is HK $ 3,400 (S$ 660), which may be more than what some Singaporeans earn.

Pegging pay to two-thirds of the median income of the top 48 earners in the professions may in a way, be an inherent bias, which may tend to contribute to policies in the future that may continue to widen the income gap. The underlying principle that people need to be paid more to be motivated to perform is not flawed. However, some element of pay should also be pegged to the ability to raise the income of lower-income Singaporeans.

For example, the pay after the increases is about 135 times the $ 1,180 average monthly income of the 11th to 20th decile of households in Singapore, or 78 times the $2,040 median monthly income of Singaporeans. Perhaps this could also be considered as part of the benchmark for pay increases in the future.

The above calculations already reflect that by the end of 2008, the salary will increase further to 88 per cent of the benchmark.

For other ranks of the civil service, the highest increase this year is 16 per cent.

About the author:

Sze Hian has 5 degrees and 13 professional qualifications. A Wharton Fellow, alumnus of Harvard University and the United Nations University International Leadership Academy, he has served as Honorary Consul of Jamaica, President of the Society of Financial Service Professionals, Representative of the Inter-American Economic Council, Chairman of the Institute of Administrative Management, and founding Advisor to the Financial Planning Association of Indonesia. He has been invited to speak more than 100 times in over 15 countries on 5 continents, authored 3 books and quoted over 700 times in the media.

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17 Responses to “Ministers’ Salaries – is the government losing touch?”

  1. leo said

    Mr Leong does make a very good point about benchmarking to the lowest income to motivate political leaders to raise the income of the lowest paid workers in Singapore.

    There would seem to be an inherent bias that if I know my pay is benchmarked against the top 50 paying professionals, I would be motivated to see what policies i can make to raise their salaries.

    That said, the salaries of the top 50 or 100 people in any field in the private sector are not likely to be affected by govt policies much. I’m pretty sure that Wee Cho Yaw’s salary is not much affected by govt policies directly.

    Moreover, the richest in the country are also the most mobile. Given enough disincentives or disadvantages, they will leave taking their business and their capital with them. In IR-speak, we must know how to treat the whales well.

    And while there is a lot of things the govt can do to raise the salaries of the lower income (e.g. minimum wage, protecting industries, preventing layoffs/retrenchment) in the long term, these policies may not be in the best interests of Singapore.

    I agree with the principle that the income of poor should be a deliverable that contributes to the decision as to whether Ministers salary goes up or down, but at this point it is at best a concept.

  2. kevin.l said

    losing? more like ‘lost’.

    probably started drifted off a long while back. lol.

  3. Yamasam said

    In my eyes, they are no difference from those corporate mercenary. Nothing more, nothing less.

    This whole exercise may just backfire when the next crisis struck. Be it financial like the Asian Financial crisis in 97/98, or medical such as SARS in 2003, it would be very difficult for the political leaders to rally Singaporean together.

    At least I won’t bother to stand together with them. They have taught me what the Cantonese would say : Kee Kee Koo Kee Kee.

    Singapore is losing her humanity, no thanks to their political leadership.

  4. Keith said

    Remember this at the next election and voice out with your vote.

    Just think with the one major cost of living being driven up, property prices, naturally only the foreign expats earning supernormal profits will be left here…thereby representing the top earners….and we know where that will lead. More pay hikes for ministers because the country top earners are earning more! Just pay more…. soon there will be nothing but expensive representative offices and cheap foreign workers living in containers and we can all move to JB or Bintan and start over again.

  5. Joshy said

    It’s quite sad that the ministers pay is not deemed enough while others in the lower percentile of the nation have to be told to survive on a much smaller amount. What is ironic is that these people who earn much lesser are still having to contribute albeit indirectly to the salaries of the ministers thru their daily expenditure.

    What saddens me is that the citizens of Singapore are a hardworking bunch of people and they are never credited for building up the nation, instead the government gets full credit for it. When the time comes to increase pay, the government gets it instead of the people. Its this kind of two-faced approach towards us, the citizens of Singapore that is really increasingly unbearable.

  6. quzy said

    No the government is not losing touch. It has been listening hard to Singaporeans.

    Last May, 66.6% of us rubber stamped their past and future decisions.

    We knew what was going to happen.

    So Singaporeans, stop whining and reap what you voted.

  7. sam choo said

    it is not abt money but abt the right to lead by example.

    what prc NS and prc of a soldier’s life, if so called leaders of the family nation thinks abt their pockets first.
    It may be unhygienic but he Chinese/family eat out of the same bowl.

    sam

  8. Lai CF said

    The Torture of Tantalus, whose punishment by the Gods was to have food and drink always hovering out of his reach.
    ————————————————————————

    The Gods rewarded themselves for a “job well done” as theri entitlements, whereas The People are struggling with daily livings as affordable housing and medical care “are always hovering out of their reach” perpetually….as whenever there ready to grab one…”mean testing” and new policies (GST, utiltiies, public transport, HDB pricing, etc are icnreased) applied.

    This is the two halves of SIngapore..
    Either you “Haves” or “Have ntos”…nothing for “sandwich” class.

    Singapore is a polarised sociey with a quantum gap between the “Haves” and “Have Nots”.

  9. Hi Lai CF,

    These are the words of PM Lee after last year’s general elections:

    “We must not allow ourselves to be divided between haves and have-nots, or winners and losers … if we let a politics of envy drive a wedge between us, our society will be destroyed, and all will suffer. That must never happen.”

    From channelnewsasia.

    It is precisely what is happening – and the PAP is the cause of it.

    Regards,
    theonlinecitizen

  10. Chuck said

    I wonder how many percent of the budget goes into helping the poor. I don’t see how ministers should get better paid while the poor can go hungry. A government is here to help the poor but yet I still see old folks going around begging for money and collecting soft drink can to earn those few cents while our high ranking officers are all so well fed. Compare the % GDP that goes to this pay hike and compare to their puny aid packages to the needy. I wonder if there is any credibility behind this pay hike.

  11. MM (Movie Monster) said

    Just as a matter of curosity, what is the rank of salaries of say, US governmental “key appointments holders”, as compared to range of income in that country. Are they the top x, middle y or lower z as compared to the income of professionals in that country?

    If we have rankings of “key appointments holders” of various countries:

    US – president ranks x1 of all professional pay
    UK – PM ranks x2
    etc

    The data can be used as a reasonable and more convincing way determining the pay for SG ministers.

    There are other reasonable ways to benchmark SG ministers way. The current benchmark invented by the PAP is not one of them.

  12. Optimistic said

    I think the strategy moving forward for Singapore should be :

    – Once we detect the economy is slowing down, we should
    immediately raise the Minister’s salaries so we
    can get the economy to pick up again

    – If the economy is flat, we should immediately raise the
    Minister’s salaries so we can get the economy going

    – Once we detect the economy is growing fast, we should
    immediately raise the Minister’s salaries so can
    can get the economy to move even faster !

  13. jeremy said

    Has anyone seen the latest issue of Time magazine? It’s hilarious.. under their “Numbers” section:

    Raises:
    $2 million
    estimated annual salary of Singapore’s Prime Minister, Lee Hsien Loong, after the government announced it would increase ministers’ pay by up to 60%.
    $400,000
    annual salary of US president George W. Bush.

    granted, US politicians do get certain kickbacks.. (I suppose we can imagine Monica Lewinsky as once being desirable..)

  14. anonymous said

    This is an excellent rebuttal to all the nonsense we’ve been reading from the press.

    At the end of the day, it is the prosperity of us Singaporeans that should be the basis for judgement of ministerial performance. We have had to suffer cuts in CPF to help the nation tide through bad times and now we are required to contribute more in terms of CPF. There hasn’t been any significant improvement to our lives to justify the significant increases the ministers are getting.

    Some people will say that benchmarking against the lowest is wrong. But it is not any more wrong than benchmarking with the highest. One extreme is wrong doesn’t mean the other extreme is correct.

    Our government’s main selling point to us is that if our highly mobile elites were to leave us, our leadership would be badly shaken and we would all suffer as a consequence. This is fallacious for several reasons:

    Firstly, to insist that the government control the entire economy and to place our future in the hands of a few elites may not be the wisest thing to do. It may have worked fine in the past when things were a lot simpler. But with globalisation and increased technological leaps, it gets harder and harder for any individual, let alone an elite to strike lottery. For if the elite fails, it would mean dire consequences for us all. We only need to look at our once over dependence on electronics manufacturing to understand that our elites can and do fail terribly.

    Much better to shrink the government and let economic decisions dissipate throughout the population. Two heads are better than one and three non-elites beats one elite any time. So rather than pay a premium to keep those elites, let these elites dissipate throughout the economy which can only strengthen, not weaken our economy.

    There is truth to the government’s argument that a welfare state will weaken our nation. One only has to look at US and Germany to know the huge amount of resources needed to support those out of job. The fallacy of this argument is that we are so, so far away from the level them in terms of public assistance.

    There is really not a lot the government can do to improve the poor lot except to give them money. Be it workfare or minimum wage or protection, whatever you call it, you cannot run away from these social responsibilities.

  15. Sad s'porean said

    I am ok for the government salary rise, thier contributions are worth for the rise. But how come the retired MM and SM still getting so high? how many more SGD3M after current one retired? Maybe after 20 year later, one of our young generation need to rise not only two old people due to low birth rate, they also need to pay donno how many MMs with salary more than SGD3M due to future increase of salary. Now all citizen need to pay 2 SGD3M, 10 years later 3 SGD3M++ and 20 years maybe 4 SGD3M++ add up to be SGD12M++, do u now how many senior citizen can this amount of money can help? with current market one eldery can get every month SGD297 say SGD300, so one year SGD3600… total with SGD12M++, can help at least 3333 senior citizen for thier one year expenditure.

  16. xwen625 said

    I like and respect those who work very hard to earn an honest living. Many times, these are ordinary people who earn very little.

    Just the other day, an Indian man came to deliver a bed I ordered.

    He was sad. After the Ministers Pay hike was announced, the policy makers begin to tell companies to be circumspect in raising workers salary.

    What perfect timing.

  17. guitar tuner

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