a community of singaporeans

Ministerial salaries – 2nd upward revision soon

Posted by theonlinecitizen on November 27, 2007

By Andrew Ong and Andrew Loh

On the 9th of April 2007, Minister in charge of the Civil Service, Teo Chee Hean, announced in Parliament:

“Salaries at the MR4 Grade are currently at 55% of the benchmark. Given the large gap, it is not realistic to close the gap fully in one go. Instead, we will close half of the current gap, that is, from 55% of the benchmark, to 77% of the benchmark by the end of this year.

This will be effected in two steps – one step now, and another step at the end of this year. Next year, we aim to close half of the remaining gap, bringing salaries to 88% of the benchmark by end-2008.”

The first revision took place on 1st April 2007. The second revision is expected to take place anytime from now till the end of this year, as the minister said. Given that it is uncertain if Parliament will sit in December, one wonders if the second revision will be debated or discussed in the chambers.

How will Singaporeans react if and when it is announced?

Booming economy, inflation woes

The economy is booming. GDP growth for the whole year is projected to be between 7.5 per cent and 8 per cent (CNA). On the job front, according to a study by IBM Consulting Services:

Singapore created 598 jobs per 100,000 last year, making it the top-ranked country in terms of job creation productivity, far ahead of even the second-placed Czech Republic, which had 389 new jobs per 100,000 residents last year.” (MFA)

However, not everyone is enjoying the fruits of what MM Lee called “Singapore’s golden period”. Besides the widening income gap, inflation has also crept into the equation.

The latest report on the Consumer Price Index makes for depressing reading for many Singaporeans. October’s CPI was 3.6% – the highest in 16 years. (See here).

Daily necessities are rising in cost with no end in sight. Everything from public transport to flour, from chicken to eggs, from petrol to housing prices, from milk to electricity have shot up, some to record levels. PM Lee’s recent assurance that inflation is “well under control” is little comfort to those who are struggling to keep up.

(See TOC’s aggregation of the price hikes for 2007: The relentless rising cost of living.)

Inflation for 2008 is expected to reach 4%. (Straits Times)

Inflation – falling off the chair

With last Saturday’s Straits Times frontpage headline- “October inflation hits 16-year high of 3.6%” – grabbing the attention of many Singaporeans, it is clear that cost has not only risen but is also a major worry for Singaporeans.

The ST reported in that article that DBS Bank’s Irvin Seah “fell over his chair” when the figure was revealed. “This is way beyond market analyst expectations,” he further added. “We knew inflation would go up. We just didn’t know it would come so quickly.”

This piece of news was a confirmation of the dreadful reality that the average Singaporean is already aware of – and living daily. What was disturbing about the news is that the 2 per cent hike in the goods and services tax (GST) in July was cited as one of the causes for the rising cost of living.

This is definitely not good news, especially for the lower income group.

The GST hike in question

When Prime Minister Lee Hsien Loong first announced his plans to increase the GST from 5 percent to 7 percent on 13 November 2006, he explained it thus:

“Speaking in Malay, Mandarin and English, Mr Lee explained that the hike was necessary to finance the enhanced social safety nets, needed to help the lower income group and he emphasised that the offset package would more than counter the rise in GST.

While Singapore’s current model to tackle the widening income gap is sound, Mr Lee said the government would take on two approaches to deal with the new environment – to strengthen the safety nets and tilt the balance in favour of the lower-income groups who do not benefit from the fruits of economic growth.”

However, from the recent article by Reuters titled “Singapore’s economy boom widens income gap” and with the figures of the record inflation presented to us, things do not seem to be happening in favour of the lower income group at this point of time as planned.

In fact, it appears that things are worse than before – the gap widening more and the lower income struggling to make ends meet or to keep up.

It looks like it is the lower to middle income (the mass) groups that are truly footing the bill for the economic development in Singapore with the high income group continuing to reap the “juiciest” fruits of our economic growth.

Good time to revise ministerial salaries again?

In light of the above, is it a good time to revise – upwards – ministerial salaries again? Government ministers have said, when defending their pay hike, that there never is a good time to increase salaries. That may be so but there also should be consideration for moral leadership.

In the April announcement of ministers’ pay hike, revisions were also made to bonuses for ministers. On GDP Bonus for ministers, Mr Teo said:

“We will increase the bonus to a norm payment of 3 months if the economy grows by 5%. The minimum payment will remain at zero if the economy grows by 2% or less. The maximum will be increased to 8 months if the economy grows by 10% or more.” (link)

On Performance Bonus for ministers:

“We will increase the Performance Bonus by 2 months for officers at this level, to a norm of 7 months.” (link)

Thus, it would seem that ministers would be getting a windfall this year-end. A second upward salary revision, a 7 months Performance Bonus and a 3 months GDP Bonus – since GDP is expected to be between 7.5 per cent and 8 per cent.

For the average Singaporean, he can expect continued competition with foreigners for jobs, the lower-skilled Singaporeans continue to have their wages depressed by cheaper foreign labour, he can also expect record inflation leading to an even higher cost of living next year, as some experts are predicting.

It is little wonder then that there have been no public announcements of the 2nd revision of ministers’ salary so far. It is undoubtedly a politically sensitive issue. One wonders if any announcements will be made at all, with the year ending soon.

We have slightly more than one month to wait to find out.

Read also: Annuities for Singaporeans, pension for ministers?

And: “Singapore less attractive to expats: Survey” by TODAY.

And: “S’pore enjoys record employment, higher wages” by The Straits Times 



24 Responses to “Ministerial salaries – 2nd upward revision soon”

  1. Oh there will be an announcement alright! Another series of mind boggling charts and op-eds by Andy Ho and Chua Mui Hoong (senior Spin Doctors editors) castigating us for being petty and ungrateful.

    But our rage will simmer as year end bonuses for public/private sectors are announced and we get into the Christmas spirit.

  2. mr.udders said

    Why don’t we just march?

  3. Wait, is this a further revision to the existing million dollar salaries our ministers were lambasted (and they ignored) about? Or their million dollar salaries simply being implemented in stages??

  4. Ace said

    As usual!!!! The magical benchmark of the magical formula agreed by the country who magically have no clue about AGAIN!!!

    This is almost like an episode of Teletubbies….”again…again….”

    Inflation hitting hard….
    Middle and low income struggling….
    Life gets tougher…..

    THEN, EAT CHEAPER FOOD, DUN BUY ANYTHING OR DIE!! That is the million dollar solution…

    The ruling MIW have no interest in all of those trivial things.

    With the 7 months plus 3 months bonus…does that mean a minister of SGD 2 mio salary will be receiving close to SGD 3.7 mio this year? Then the PM will get close to SGD 6 mio? Even the Star charity man will be paid close to SGD 7 mio??? Somebody correct me if I am wrong.

    Frankly, the question to ask is not do they deserve to be paid that kind of money…When you are in power you can do whatever the hell it is you want…that is the truth of life. The question to ask is Who the heck put them in the position in the first place???

    Look into your hearts and beyond the complaints and whining…The answer is the people screwed themselves.

    If the poor needs less money so that they do not erode their work ethics…then how do we explain the MIW’s situation? Already have so much money so needs to ensure that they get even more motivated and come up with more million dollar solutions like the people should take care of themselves? Or eat cheaper food?

    Reality is this even if we pay those geniuses half or a quarter of their pay (which will be generous already)they will still not leave the service as the world outside will not be as kind to them. Money only buys you so much but Power is the main attraction.

    Anyway, more good years…more progress….more means testing…more taxes to help the poor….more PRs and citizenships without NS or other commitments to anyone…..more pay rise for the top tier….

    Do you feel lucky staying in a country where it is actually better to be PR or FT than citizens?


  5. Gary Teoh said

    The article is true facts,our purchasing power has gone south,the GST rebate promised by the PM is insuffienct, the poor getting poorer without bonus whatsoever, the middle income suffers too,while the ministers keep whining money not enough.Well It is time for change of government if the people are fed up just like Australia,If the government not careful, next GE we will see 52% against 48% it may happen, dont blame us

  6. carbang4 said

    “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men” – Lord Acton, 1887.

    Surely government ministers must be great men.

  7. Anonymous said

    Forty over years of history has shown that most Singaporeans that are eligible to vote, are people who talk only and no action.

    It is a laugh, that all of you are complaining now but come election, will meekly vote for PAP again, hoping that someone else can vote opposition.

    Come on it is not as if we are so gullible to not know that prices will surely go up after the elections. It is not that we don’t know minister’s pay will go up. But what do the 66% do, just vote for PAP – again.

    No need for opposition to tell me, I already know – after the 2011 elections, GST must go up, ministers’ pay will go up, petrol, rent, utilities will go up. Will I still vote for PAP? Yes I will. Because I have already place so much hope on them (and paying to much taxes to support their policies), anyone else just won’t cut it.

    Can the opposition do better than PAP? Of course not, there is no doubt about it.

  8. […] Minister Salaries – 2nd upward revision soon […]

  9. Chan TP said

    Thought Ah Long ( loan shark ) very gangster, ‘our elite’ better. want more money sure get, no need to write graffiti or spray paint. some more so legal

  10. macabresg said

    I hope they won’t do it. It’s certainly a political suicide if they try to push through amidst rising cost of living and inflation.

  11. Singapore Resident said

    >>I hope they won’t do it. It’s certainly a political suicide if they try to push through amidst rising cost of living and inflation.

    Lee fearlessly introduced a number of other far-reaching …, despite the fact that certain of them were unpopular and caused “endless letters to the newspapers…”

  12. Kaffein said

    Mayhaps the incumbent govmt thinks they may not win so big the next election. So better milk all they can while they are still ahead.

    I hope SGPreans come to terms why it is necessary for oppositions (if better strong oppositions) to be in the government. Who is there to check on the ministerial salaries? Who is there to audit the investments and CPFs? Everything seems to be a blackbox right now, how the govrmt justify pay-hikes, GSTs, inflation, etc.

    Well, you get whom you vote. Hope we are wiser next round.

  13. I hope our opposition parties leaders would do more to re-look into their political positions and re-strategise.

    They desperately need to show to us Singaporeans what they can offer as a credible alternative other than the PAP for us to vote and support them with confidence in taking Singapore forward.

  14. disgruntled said

    WTF ! Ministers get a norm of 3 months bonus and up to 8 months if GDP grows by 10%. So if the GDP (not wages, mind you, GDP including MNCs profits) hits 8% this year, they get 6 months (pro-rata: 1 month for every percent above 5%) ? And rank-and-file civil servants are getting 2 months ?

  15. Charles said

    I think the majority of Singaporeans can and would be agreeable to a campaign for minister’s wages to be cut (yes you heard me right) instead of arguing for it to be retained at same level. Our ministers are getting way too much.

    Even if the economy is well-managed, do you think they deserve a raise (when in fact, they are already paying themselves so much).

    The issue here henceforth, is not so much of minister’s salaries pegged to economic performance but rather paying themselves too much in the first place.

  16. Daniel said

    Even if the economy is well-managed, do you think they deserve a raise (when in fact, they are already paying themselves so much).
    what determines the economy is doing well in first well ? By coffer’s own words through propagandic media ?

    More good years, they say. No wonder they say more good years. They are referring to themselves !

  17. […] Read related TOC article on Ministerial salaries here>>> […]

  18. blackshirt said

    If we are in the political arena, we want something to get our opponents into some bad reputation. This would be it.

    Despite of the rising cost of living and the impending economical slowdown, they still want to have their pay increases. I say, let them have their pay increases. The net effect is to have a lot of displeasure and anger on the ground. Some will forget this episode after some time but many will not. People need to open their eyes wider and see through the greed of the government. Their kind of self-serving measures will start to shake more of the 66.6%.

    Even there is no pay increase, the money will still go to cover “unknown national investment losses”.

    Let them have their suicides. Let them lose more ground.

  19. We are dumb said

    One question to all, is whats happening because the people in power are smart or is it because we are dumb people who do not realise that democracy is people power and not pappy power. Dumb Dumb lot

  20. saintmoron said

    This tiny red dot will be disarranged eventually by money crazy culture and it will be soon.

  21. Glory for Nation or Money?

    I hope the government does not attempt to break that already delicate bond with us by forcing its way through a 2nd ministerial pay hike.

  22. middle class said

    Home buyers face the levy as soon as they sell their HDB flat and buy a 2nd flat that is lower than the previous one. This is to reduce the dependancy on the subsidy provided by the gov.

  23. middle class said

    Middle class are samwitch in-between.


  24. saintmoron said

    Find happiness anywhere else if one can and leave all the sorrows behind. It is not just no money no talk here; the poor has to slog and worst of all be treated like a dog whose master gives commands non-stop.

    The dog can’t bark, bite for it is securely muzzled, the days ahead for the poor will be more difficult and sufferring. Jumping from highrise and into mrt track will not solve our problems; so for those who contemplate suicide, I suggest they starve to death in public and be folk heroes(heroine). But then again be reminded, the World is very big, if wanted criminals went abroad and were able to survive, why not us.

    We may have difficulties changing our lives here, but maybe we can change our fates elsewhere. Many of us have seen with our own eyes during our travels abroad how poor people in so-called third(even fourth- un/underdeveloped) countries LIVING HAPPILY.

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