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Ministerial Pay: Uniquely Singapore, F1 or F9?

Posted by theonlinecitizen on January 3, 2008

By Leong Sze Hian

77% Private sector benchmark = 9 months performance + GDP bonus?

I refer to the Public Service Division’s (PSD) reply “Public sector’s benchmark pay includes all bonuses” (Today, Dec 26) to my letter “A question on remuneration” (Weekend Today, Dec 22-23).

It states that “The total annual pay for ministers includes all bonuses, such as the 13th-month payment, the average performance bonus and the GDP bonus. In the latest revision, we have also included the imputed value of the pension.

With all these components included, the salary for ministers at the MR4 grade will reach 77 per cent of the benchmark”.

I would like to seek clarification on the following:-

Since the exact quantum of the pay rise was announced in Parliament in April that the second and third ministerial pay revisions on 1 January 2008 and 1 January 2009, would reach 77 and 88 per cent respectively, of the private sector benchmark which was based on last year’s private sector pay, how is it possible to know in April that the performance bonus at the end of the year is going to be nine months?

In addition, since the GDP bonus is variable from 3 to 8 months, what is the GDP bonus for the year, which is expected to be at the upper end because of this year’s good economic growth?

As both the performance and GDP bonuses can only be known at the end of the year, is the PSD saying now that it just so happens to be exactly the same 77 per cent benchmark announced in April?

Is the performance bonus different for different ministers?

If so, then saying that “The total annual pay for ministers includes all bonuses, such as the 13th-month payment, the average performance bonus and the (average?) GDP bonus”, does not really answer the question as to whether any of the ministers have exceeded the private sector benchmark.

I would like to suggest that a break-down of the total remuneration of each and every minister be given, to put to rest the questions as to whether the private sector benchmark has been exceeded.

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19 Responses to “Ministerial Pay: Uniquely Singapore, F1 or F9?”

  1. Daniel said

    Did these ministers and president deserve all these salary and bonus ?

    All the whole, I see that they don’t deserve it at all as they did not solve any problem effectively. What they do is merely at the expense of people through insane price increment over anything else. And these price increment result in higher GDP instead. Not only then, the price hike has basically no rational reasons given. They just do as they please, GST, ERP etc. Put them into private sector, and I have no doubt they couldn’t even last a month.

    It is shameful that all they quote that they deserve it because of good economic growth. But how does that translate to benefit of the Singaporean on the whole ? It seem that the growth is purposefully create just for the sake of greed. We should peg their salary, bonus and perk to overall benefit of the citizen instead. That will teach them to be less selfish and more concern about citizen not money.

    Does the president deserve this salary working as a muppet ? What role does he really serve ?

    This ought to be the greatest joke on earth to increase their salary and bonus by their own justification. I can’t tell you enough how the foreigners especially those from western countries are looking down on Singaporean because of these comedians.

  2. Dead Poet said

    Wishfull thinking. Words like transparency, declaration of assets, total numeration, breakdown of cost or details of subsidy are taboo words in our first world country. Such seditious words are only uttered in countries with mediocre governments. Here corruption has been eradicated, perhaps replaced would be a better word, with a reward system devoid of morality and decency.

  3. The 77-percent-benchmark already includes the GDP and performance bonuses. See:

    “The revisions will be effected through adjustments to both monthly salaries and annual components.”

    “With the above revisions, close to half (47%) of the annual package of MR4 grades and above will be variable compared to about one-third (34%) today. 20% of their salaries will be predicated on the GDP bonus. Another quarter of their salary is performance dependent. The Prime Minister decides on the level of performance bonus each minister receives.”

    There is a cap on the maximum *total* salary, which includes GDP and performance bonuses. If GDP growth is bad, the ministers will not receive up to 20% of their annual salary. If the minister is performing badly, he will not receive up to 25% of their annual salary.

    The benchmark is against the *total* salary, which is the monthly salary + GDP bonus + performance bonus. A minister can get the full 77%-benchmark-ed salary only if the GDP is 10% or more, and if the prime minister is very happy with his performance.

    A minister cannot get higher salary than the 77%-benchmark as the bonuses are capped. So although no one can accurately predict what the bonuses will be like, it is already known in advance the bonuses cannot exceed a certain amount.

    Monthly salary is 55% of total. GDP bonus is up to 20% of total. Performance bonus is up to 25% of total. Hence, the maximum bonus that can be given out is 9.8 months.

  4. The URL that I failed to link to above should be http://app.sprinter.gov.sg/data/pr/20070409992.htm .

  5. Andrew Loh said

    Hi Cheong Leong,

    Thanks for the explanation. It is of course known that part of the salaries is variable. And you are right, ministers whose performances are not up to the mark will have a lower salary.

    The question asked is what are the breakdown for each minister – especially with regards to Performance Bonuses, so as to allow Singaporeans to see if the bonuses dished out by the PM are justified.

    On another note, the president and the prime minister do not get Performance Bonus. Instead they get what is called “Service Bonus”. It is actually a 7-months bonus:

    From Channel NewsAsia:

    “Previously, the President, Prime Minister and Speaker of Parliament did not have the car allowance factored into their pay as they were each provided with an official car. With the changes, each will see their total salary increase by 25 per cent. The President and Prime Minister, along with Judiciary and Statutory Appointment Holders, will also see their service bonus — in lieu of a performance bonus — increase from five to seven months.”

  6. Mr Leong Sze Hian argued that a break-down of renumeration of each minister be public information *because* he believes the total renumeration will exceed the pre-defined benchmark. However, unless one is accusing the government of lying, the salary benchmark formula guarantees that the total renumeration will *not* exceed the pre-defined benchmark.

    One may argue that the 77% benchmark is too high or too low, or whether individual minister is performing or not performing, or whether any one individual’s pay should or should not be public information. But one should not use a falsehood to advance one’s argument.

  7. Andrew Loh said

    HCL,

    I do not think Sze Hian was using a “a falsehood to advance one’s argument”. If you read Sze Hian’s original letter, what he asked was:

    “If these (the various bonuses) are included, have they reached or exceeded the 77 per cent of the private sector benchmark, to which their pay is pegged?”

    In addition, news reports of the salary computation were unclear – especially the amount of bonuses and the inclusion of them in the final salary for each minister. Thus, the questions asked above and in his earlier letters are good for clarification.

  8. Is giving more money the only answer in retaining talented ministers?

    http://www.channelnewsasia.com/stories/singaporebusinessnews/view/320350/1/.html

  9. Hi Andrew,

    The answer to the question: “If [bonuses] are included, have [total salary] reached or exceeded the 77 per cent of the private sector benchmark” is clearly “No”. In my opinion, the government’s reply to Mr Leong’s letter in Today was quite clear on this point. Mr Teo Chee Hean’s speech, which is readily available online, is also quite clear on this point.

  10. curious said

    bonuses tagged to nominal gdp figure or real gdp figure ?

  11. Troodon said

    Hi Heng-Cheong Leong,
    It is a pointless exercise to argue whether the bonus was awarded fairly or not. In my opinion, non of the current ministers even deserve their astronomical salaries,let alone bonuses. The truth of the matter is, quite a few of them should have been fired for incompetence(can you say transport? annuities?) It is simply ridiculous that they attribute a growing economy with their good performance and blame “globalisation”, rising price of petrol etc. when things like inflation rear their ugly heads.
    Singapore’s economy actually shrank in quarter 4(http://www.bloomberg.com/apps/news?pid=20601080&sid=a966tG6OHWGo&refer=asia)
    Does this mean we should cut the salaries of the ministers then? I do not see it happening.
    Lastly, the ministers are always touting how talented they are and that how easily they will be able to make the same(if not more) amount of money in the private sector. I challenge them to do just that: Quit your jobs, and go find a company that is willing to hire you for your pay. Don’t run and hide behing a GLC or government affiliated institute. That is called cheating. I want real companies that everyone has heard of(Goldman Sachs, Morgan Stanley etc.)

  12. Ace said

    What talent?

    A minister who tells the farmers and peasants to eat cheaper food? A bunch of honest mistakes with regards to official data? A PTC who looked at their shoelaces when transport fares are hiked as and when? The LTA who only has 1 trick in their bag i.e. increase ERP build more gantries?

    Come on….If you had looked at all the articles from years past to now. You will find that all these million dollar babies are flip-flopping on what they say all the time.

    Take the case of LTA, first COE to control no. of cars on road, then when car dealers are not making money, then now focus on traffic flow via ERP. It is all about the money. Logical thought will tell you more cars on the roads same number of roads EQUALS Jam….No amount of ERP will change that. Let me ask you people this simple question, if peak hour in the evening is till 9.30 p.m. How would anyone bother to go off later to prevent the 7 p.m. jam? Then the cycle will never end and then the next step from our million dollar geniuses will be implement 24 hour ERP…anyone want to bet?

    The GST is raised to help the poor? This one takes the cake. After the “loving and compassionate” budget was announced, the sight of the MPs rushing to carry balls is worthy of an Oscar. Just look at the structure of the help package, for someone who is struggling with day-to-day living. It is impossible to understand how does making things more expensive help them? The climax of this episode was when the MM said the GST hike is to pay for the corporate tax reduction….???? What the heck is going on?

    The above is but 2 of the more recent items, if you go through your memories far back enough, you will find alot more easily.

    In the context of a commercial sector performance like the above, you will have long lost yr job. Yet our million dollar babies are never fired no matter what happens. If there is no risk in the job then you cannot command a risk premium as simple as that.

    The pay is already crazy and yet they keep adding to it. With the people being treated like an ATM. Come on, wake up people. You cannot justify behaviour like this no matter what you say.

    I hope this lesson over the past few years stays with the people and cause a reaction when the time comes to vote.

  13. LLL said

    HCL,

    The root cause is your government does not disclose full details. That’s where the query is. However, to say that one is using ‘falsehood’ is just inappropriate. Secondly, how do you come to the conclusion with a ‘clearly No’ is mind boggling when your minister does not use the word ‘No’. It will be more appropriate if you think is ‘No’.

  14. Andrew Loh said

    HCL,

    Thanks for pointing it out. Your point is noted and taken. 🙂

    Regards,
    Andrew

  15. Hi Troodon,

    I am not even close to arguing whether the bonuses are fair or not. Or whether the ministers are deserving of their pay or not, for that matter. Do take a re-read of what I’ve written. 🙂

    By the way, the negative figures is for the latest quarter only. The annual GDP (figures not out yet) is expected by the government to be between 4.5 to 6.5 percent. See: http://www.bloomberg.com/apps/news?pid=20601080&sid=a966tG6OHWGo&refer=asia

  16. Dr Syed Alwi said

    Dear People,

    Is merit to be measured purely by financial and academic means only ? Or does intangibles like EQ, honesty, humility etc play a role in determining merit ?

  17. Gary Teoh said

    I agree with Troodon which are true facts.What kind of million dollar, and colombo scholar minister is this? Tell people eat cheap food,to tackle inflation, and another joker minister talking about ERP to increase car ownership.Really sick of them.

  18. Daniel said

    “I hope this lesson over the past few years stays with the people and cause a reaction when the time comes to vote.”

    Don’t worry, the same millions dollars genius will be glad to implement another round of creative voting rules to help the poor again by voting for coffers automatically through walkover. Use the media to feed another propaganda to scare the pleasant and the foreigners. Last time it is your daugther that will become maid. How about your CPF money go in drain if another party takes over ? How about no upgrading if you fail to vote for the coffers ? As history shows, they will resort to the usual tricks on their sleeve because no one will dare do anything drastic to the dynasty anyway.

  19. Daniel said

    The suggestions and actions taken by ministers really defy and debunk more than decades of knowledges in business books and their reasons are so radical and transforming that they should nominate for Nobel Prize while the pleasant pays for the Nobel Price.(Increase ERP to increase car ownership , blah,blah)
    Maybe our ministers are real genius and know something we yet to know of. So I suggest these ministers resigned themselves and instead publish business books so that they teach the world of their radical business and management practices. If what they preached and implemented are really so effective and workable throughout the world, they will definitely earn multitudes of times than they earn as ministers through book royalities, seminar etc.
    By the way, prepare some few stale eggs for their autograph-signing session.

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