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Paying more for good people – what if it backfires?

Posted by theonlinecitizen on December 20, 2007

By Andrew Loh

If you want good people in government, you have to pay them salaries commensurate with the private sector.

This is what we have been told – by the prime minister, ministers, PAP MPs, the local media and some Singaporeans.

It is an argument based on demand and supply – the demand and supply of talented people. It has also been argued that because of Singapore’s small base of 3 or 4 million people, talents are in short supply.

Thus the public sector will have to compete with the private sector for them. Namely, through financial rewards.

However, perhaps the government has not paid enough attention to an issue which such a formula will create. This is the perception that those in public service are money-grabbers.

Indeed, the recent 2nd upward revision of ministers’ salaries has had that effect, as with previous revisions. Public servants, particularly ministers, are seen as hoarding money for their own personal and selfish benefit.

Why should anyone want to serve?

The question we need to ask is this: If public servants are seen to be money-grabbers, who then will want to step forth and serve? Would an ordinary Singaporean, talented and honest, want to subject himself to such public perceptions or derision? Would he or she put himself up to serve, with all the accusations and the gossips that will come not only from strangers but also from friends and family?

Indeed, if one looks at the General Elections and the Presidential Elections of recent past, finding candidates to stand had been a problem. Even the PAP, with all its resources and its rewards, has had to deal with talented people who would rather not step forward and serve, to say nothing of opposition parties.

President Nathan was unchallenged in two Presidential Elections. Why is this so? Is it because we really do not have enough talent who would stand as candidates, or is it because talented people do not want to be subjected to the public perception that they are “only out for money”?

In view of the very stringent qualifications to even stand for election as president, do people of such stature who qualify need to be paid so much in order to attract them and retain them?

Counter-productive

The formula to pay the president private sector salary may be counter-productive, because those with the stature to qualify may be turned off from even serving the country as president, because of the groundswell of discontent.

Who wants to be a $4m+ president and let all his friends, relatives, every citizen think that they are greedy for so much money even at that late stage of their lives – it may in a sense, tarnish their own name and reputation which may have taken almost their whole lifetime to build!

Could we, therefore, be seeing a situation whereby credible, able, talented people are shunning public service precisely because of the negative perceptions of being the highest paid public servants in the world?

Consider this:

The president receives more than $21 million for his one term in office. Here is a rough calculation of President Nathan’s salary for his 2nd 6-year term in office:

Salary for 2nd term in office:

2006 – $2,507,200 (Source: TODAY)
2007 – $3,187,100 (Source: Straits Times)
2008 – $3,870,000 (Source: Straits Times)
2009 – $3,870,000
2010 – $3,870,000
2011 – $3,870,000

Total – $21,174,300

Together with his salary for his first term in office, the president would be receiving something between $30m to $40 million in 12 years of service – an insane amount for a president whose roles are still largely ceremonial.

What then of the prime minister and ministers? What then of MPs?

I do not want to go into the debate about how and why political office holders are and should be treated differently from private sector employees. Enough has been said about that.

We must be careful that we do not be blinded so much by monetary rewards that we end up, ironically, compounding the problem instead of solving it.

Suffice it to say that it is still true that political leaders are quite a different breed from a businessman or an economist.

And that is how it should be.

Singapore’s political culture needs to change

Remember also that the problem is one of having enough top brains in public service – and not necessarily one of not paying them enough.

At the end of the day, what must change is the entire political culture in Singapore. It is in this light that I agree fully with what Ms Catherine Lim said in her open letter to the prime minister.

Unfortunately, even such an honest, open letter is rejected for publication by our government-controlled newspapers.

Is it any wonder then, that we are having problems finding people who are passionate enough about Singapore to step forward?

Without changes in the political culture of our country and people, how can we expect to find able and passionate political leaders?

Paying them such insane amount of money may turn out to be counter-productive and create an even more serious problem – the entrenchment of apathy.

Money only takes you so far.

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26 Responses to “Paying more for good people – what if it backfires?”

  1. AY said

    Utterly obscene and disgraceful of the present government that has completely lost touch with ordinary Singaporeans! Singaporeans just need to kick themselves in the butt and bear the pain.

  2. Lyer said

    I read, in ST, the official comments on deducting 7% from senior civil servants’ remuneration to “fund” their pension. The spokesman lied about why this deduction was made only now….he said it was becos their salaries have been below the private sector benchmark in past years!!!!

    He thinks S’poreans have memory loss. I distinctly recall Teo Chee Hian saying that he will look into how to factor in ministerial pension into the remuneration calculation….after many pointed out that ministers are enjoying taxpayers’ funded pension to the tune of $177,000 per year from age 55 till death.

    Thus, Mr Teo had admitted that ministers have been receiving free lunches in the form of guaranteed pension. Now this spokesman tried to pull a fast one on us!!!! What a liar.

  3. Gerald said

    I think you have a good point there. There are already very few Singaporeans who are even remotely interested in politics. Assuming that the future leaders that S’pore needs are those who can easily earn tens of millions in the private sector, why would they be enticed to public service with a “mere” $2 million a year? It would be primarily a passion for service that would lead them to enter politics. (I’d hate to be led by anyone with any other goals.) The current salaries are therefore neither here nor there. Might as well lower it to say 10% higher than the OECD (i.e. the rich, developed countries) average — that will probably be work out to about $500K for the PM. Isn’t that more than enough for a passionate, public servant?

  4. Clement said

    Totally agree with you, but I am sure the PAP will have a counter argument..to justify their salaries. I still believe that we should pay what they are really worth, but not a flat rate for everyone. Don’t tell me a ORD general was earning 2 million dollars a year before he joins politics? Then, how many generals are there in SAF – how many millionaires are there – fighting for money only? I dread to imagine my country degrading to a money-only nation. I am really, really very sad – because I WAS so faithful a PAP voter in the past…there are still 3-4 years more..hopefully I see a good change either in the PAP or the opposition, otherwise, I think patriotic Singaporeans will be listed as an endangered species – don’t count on instant species (like the newcomers.. it takes time for patriotism to build up).

  5. Alan Wong said

    Our leaders like to say that “If you want good people in government, you have to pay them good salaries commensurate with the private sector”.

    The irony of the above argument is that it would be equally correct to say that our previous leaders such as Goh Keng Swee, Rajaratnam, etc. may have been up to no good since in those days our Gahmen had not paid them salaries commensurating with the private sector.

    And this also implies that our current Minister Mentor had suddenly become “good” in recent years only because his pay is now benchmarked to the private sector only recently.

    Such is the wisdom of our shameless leaders!

  6. Leong Sze Hian said

    With the 3rd scheduled pay increase for Ministers on 31 Dec 2008 to catch up with the private sector benchmark of 88%, the President’s 5-year total pay may be even more than $21 million!

    Cheers

    Leong Sze Hian

  7. Kaffein said

    Look, I would not mind paying good salary for good policies and able people. But for PAP to quote that the ministers are highly sought after people in the private sector? I find it amusing as I have yet to see any holding a CEO or senionr director in such companies (GLCs don’t count!).

    For any CEO, when he fails to perform, he gets the boot (just like Citigroup’s chairman) from his stakeholders. We, Singaporean Citizens are the stakeholders. I don’t know what we have been doing.

    But for SG Inc, even with the tremendous losses in Temasek Holding’s shares and investments, I still do not see the chairperson’s head on the blocks.

    And that constitutes one of the main reasons why dynastys fall in past China histories.

  8. abao said

    Go read the Spring and Autumn Analects. Then analyse it slowly.

    FYI the entry is at: 鲁襄公二十六年,蔡声子复伍举。

    That is what the State is doing and also what the State has become.

  9. […] by The Singapore Daily on 21 December 2007 Get Rich or Die Tryin’ – The Online Citizen: Paying more for good people – what if it backfires? – Andrew: Inside & Insights: For Self-interest or People’s Interest? – Yawning Bread: New […]

  10. dominique said

    just imagine one fine day, Singapore realised it cannot afford to pay so much for its civil service.. will these people pack up and leave then?

  11. SS Lee said

    Which Minister/MOS has left and found a real private sector job that pays the same or more?
    Their packages are totaly unjustifiable! Does a CEO of a private company have 2 senior CEO’s holding his hands?

    Thanks to the 66.6% who don’t see the forest from the trees and allow themselves to be cajoled by the machinery of the propoganda machine.

  12. saintmoron said

    “will these people pack up and leave then?”, unquote. And when they pack and leave, will they leave anything behind? Eh I mean will they ever think of their subjects(local born citizens) and feelings for their once ‘motherland’?

    When they do settle abroad, they will naturally become big time foreign investors, consumers in their adopted countries with plenty of freedom to splurge without inviting envies and suspicions.

  13. cblee said

    even if they increase their pay by 50% now we also must accept it bcos what can we do. cannot protest, no one to represent us, people with no power. singapore is their country not ours. have opportunity will leave this sick place for good.

  14. Lyer said

    Govt kept saying good senior civil servants are leaving becos of PAY, but it never produce any statistics to support that claim.

    If ministers are only in it for the pay, then we should pay our NS boys private sector salaries as well!! Why should our boys sacrifice for this nation when even ministers talk only about money??? I say, NS boys’ salaries should be pegged to average private sector pay becos I’m sure there are many talented boys wasting away in NS.

  15. Keith said

    The Singapore GP is asking for hundreds of volunteers to be marshals for the F1 race next year. Free labour to help generate revenue for the govt so that they can claim credit to increase pay even more. The irony is that the govt always say that there is no free lunch in S’pore.

  16. Tammy said

    Anyone knows what Yeo Cheow Tong is earning now?

  17. Lyer said

    Many ministers are far from talented….including Yeo. It is very obvious why PM Lee did use Yeo as an example of “talent” leaving the cabinent. Most likely it’s becos Yeo’s current pay is lower than what he drew as a minister.

  18. TuraiKiller said

    Mr Yeo is earning less then $15k per month. So do u quy think they are ready worth so much as they demand even one of newly minister last tme was a GM with one of freight coy & was question on TV as well as he claimed, make a guess could a GM earn than $100k per month, I guess the most he is getting $12k/monthly max. So they just make up story alright, so we got to think more & to be smarter …

  19. superman said

    Attracting and retaining talented people in the government service is one thing. Firing people who do not perform is another. While we have clear benchmarks to peg salaries to top performance, we don’t have clear performance standard to fire people who do not perform. Either that, we have done an excellent job in hiring great people, because the last I recall no minister has ever been fired for poor performance.

  20. carbang4 said

    I agree with Superman. It seems a that a certain culture of non accountability has evolved within the PAP and civil service machinery. They get top dollar without having to worry about being answerable to anyone. Could this possibly be described as “legalised corruption”?

  21. Gary said

    Top $ for top people. It seems like we have very quickly forgot the NKF affair. Only when the shit hits the fan then we start learning.

  22. Yeo is totally incompetent. Now he is linked with his wife’s sister’s boyfriend who just opened up a “bistro” in Kabul Afghanistan. The wife’s sister lives in Myanmar. Draw your own conclusions.

  23. kingfisher said

    Such an asymmetric political mix as to be almost incredible that S’poreans are expected to stomach:

    Million $ pays- incompetent performance;
    most dangerous wanted terrorist- only lowly rank people are punished;
    limping terrorist-such an easy escape;
    such obvious security lapses – no management oversight
    a disaster if I may say – yet the overpaid PM says what to do, dont over react; the overpaid MM says you are all complacent, not his son!
    we didnt pay peanuts – still we got monkeys!!!

  24. Snova said

    This few weeks, your old posted subject is coming up in discussions again; also joined by Mr Tan Kin Lian’s recent topic on “Top Pay”.
    I had hoped that things would move on this year as Singaporeans are all suffering from the raising cost of living, adverse external impacts, etc; looks instead it is coming to a head with more inputs from the very articulate Ms Catherine Lim, and now Mr Tan Kin Lian has joined in with his very balanced views.

    Is it really true that as you had pointed out – the Singapore President will receive S$30 to S$40 million in 12 years of service ? It is incredible ! Not only me, but the world will not believe it.

  25. Andrew Loh said

    Snova,

    As listed in the above article, the president’s salary – in his second term (6 years)is as follows:

    Salary for 2nd term in office:

    2006 – $2,507,200 (Source: TODAY)
    2007 – $3,187,100 (Source: Straits Times)
    2008 – $3,870,000 (Source: Straits Times)
    2009 – $3,870,000
    2010 – $3,870,000
    2011 – $3,870,000
    Total – $21,174,300

    In his first term (also 6 years), I believe his salary was between $2m and $3m annually. Multiply that by 6 years, it easily comes to more than $10m.

    Add this $10m to the more than $20m in his second 6 year term, it is in total more than $30m for his 2 terms (12 years) in office.

    Regards,
    Andrew Loh

  26. Logicalman said

    If the President of Singapore is paid based on the selection criteria of the elected president, why is he not delivering a value that commensurates with or exceeds his pay, as is expected of a similar private sector appointment? This is something my logical mind cannot comprehend. I have no difficulty telling my children about Ong Teng Cheong as an exemplary president, but I do not know what to say about the current president.

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