Tuesday, January 17, 2012

DPM Teo : Don't compare S’pore ministerial pay with other countries

In a country where so many citizens work full time jobs and cannot make ends meet, something has to be wrong when you need to pay the ministers the highest salaries in the world. You cannot understand the underlying problems unless you understand why this is so.

"He also explained that the option of benchmarking local ministers’ pay to that of foreign leaders was
rejected because salaries at foreign countries may not correlate to Singapore’s situation, and that it was more appropriate to peg ministerial salaries based on local factors." - Yahoo! News[
Link]

After the salary review, Singapore ministers are still paid the highest salaries in the world.  Teo Chee Hean tried to explain this:

"But Teo, who is also Coordinating Minister for National Security and Minister for Home Affairs, explained that salaries of foreign office-holders look smaller but exclude such perks or benefits that such leaders enjoy."

If you look at other developed countries, they too are very transparent about salaries and benefits. If they are getting anything they are not suppose to, their political adversaries and the independent media will be all over them. In fact the recent ministerial pay review reveal many things Singaporeans did not know about bonus, pension and benefits of our office holders. We should not be comparing ourselves with 3rd world leaders anymore where leaders do many things "under the table".

It is true the PAP govt cannot peg its ministers' salary to those of leaders in other countries but not for the reasons given by Teo Chee Hean. Singapore has a political economy and its scholarship system created a power elite structure from which the PAP has to recruit its ministers. We often hear our minister say they can get better pay "elsewhere" - this elsewhere is often a position in the GLCs, law firms or banks. You would think that years of investing in scholars and nurturing them would result in a sense of public duty and these people would like to "give back" to society but that has not happened. PM Lee has a difficult job persuading them to enter politics. Singapore faces numerous challenges and social issues yet he has a hard time finding capable people. A large number of these people don't want anything to with the PAP because they don't share its ideology and, until recently,  they won't join the opposition due to fear of political repression. The rest would rather build their careers in "cushy" high paying positions in GLCs away from public scrutiny.

Gerald Ee and his committee try to solve PM Lee's problem by not going too low on ministerial salaries. Ee said he went around asking his friends and they told "under 1 million, don't bother me".  The need to peg minister salaries to the top 1000 earners in a country with the biggest income gap among developed countries reflects the distortion in our society's wealth distribution. The imbalance needs to be fixed not mirrored. These high salaries along with corporate profits which are at historic highs as a percentage of GDP are build on top of low stagnant wages of the ordinary Singaporeans and the import of cheap labor from 3rd world countries that is pushing the bottom 20% of Singaporeans towards poverty.

We had good ministers in the past without having to push salaries to these astronomical levels.  We should be asking ourselves how even ended up with this problem and why 4 decades with the scholarship system in place and sending thousands of our best minds overseas to the best universities has resulted in a dearth of good dedicated political leadership willing to serve without such sky-high salaries. Our situation is different from other developed countries but not for the reasons cited by Teo Chee Hean. The real reason is the PAP system which has resulted in a political economy with extremely unequal distribution of wealth. Elitism and a sense of entitlement has crept in to public service and selected talents believe they deserve their millions as much as they believe the bottom 20% of our society deserve their slide down to poverty. The belief that these high salaries are fair is as distorted as our income distribution....you accept it and you accept the widening inequality in our society and leaders with this belief will never be able to hold our society together.

46 comments:

Anonymous said...

After the debate, one can see where their passion lies.

I've never seen them as passionate about matters that concern the citizen.

Actions speak louder than words.

Anonymous said...

Very articulate. Thanks for your article. I look forward to your thoughts on current issues. As for the ministerial pay, LHL predecessor started monetising the office of minister and like some of the write up else where, the smart people just started to game the system.

The government was always very mercenary in terms of dollars and sense it comes to welfare and taking care of to use that has fallen by the way side. I guess people just take took the lead when it came to serving in the public office. I would say more so for those that rose through public sector. It was such a huge pay day for them that it just destroyed whatever altruism there was in the first place.

Anonymous said...

They can compare ordinary citizens salary to other countries like India and China, yet we ordinary citizens can't compare theirs to others? :(

Veritas said...

veritas-lux.blogspot.com/2011/08/kuan-yew-bio-4-1959-june-30th-kuan-yew.html

The first thing kuan yew do when he got power in 1959 was to cut government employee salary.

Today, this is what he said.

"you have to pay the market rate or the man will up stakes and join Morgan Stanley, Lehman Brothers or Goldman Sachs and you would have an incompetent man and you would have lost money by the billions"

In short, PAP ministers are potential thieves who would rather joined the thuggish, ponzi, TBTF banks, that defraud the whole world with financial weapon of mass destruction. According to LKY, this can only be reversed by bribing them more with monies so that they stay with the government.

Anonymous said...

In the past they never have to defend the sky high salaries. After the last election setback, in a way, they feel they need to convince the populace that paying high salaries to ministers is good for the country. They even take a pay cut to make the explanation more palatable. Hopefully, that would be enough for them to take back some seats in the next election or at least stem the loss. Alas, not many are buying their stories. If the next election result further erode their stranglehold in parliament, there will be more pay cuts. Those ministers who truly can get more outside and not really there to serve the nation will quit. This will keep going on until the people accept the salary levels are acceptable. Otherwise, they can continue to spout excuses to defend their million dollar pay and see how the electorate reacts.

Anonymous said...

The pay issue hides the real problem which is weak political leadership. Ministers who failed to deliver and stick to their perceived KPIs were kept on the job and jeopardised the ruling party's goodwill. On top of that, the outdated way of governing and the failure to reach out to a younger electorade and also to the sandwiched post independence generation did not endear themselves very well. They are obviously living in ivory towers.

market2garden said...

~Elitism and a sense of entitlement has crept in to public service and selected talents believe they deserve their millions~
SG is really unique in the sense that we don't have Ministry of Culture or even a division of Culture for the long-term nation-buiding purpose. And "The Arts" is not the exact equivalent of Culture.
Loss of a generation or two can lead to the demise of Singapore.

Anonymous said...

Just imagine you have multiple appointments. Mayor + Minister of State + MP Allowance.

Its like having 3 jobs with 3 different pay cheques......

Amused said...

The Million dollar salary is needed by PAP to recruit a prospective Minister, as few are willing to associate with the party. This is in stark contrast to the oppositions which have recruited many Minister-calibre Singaporeans without any financial promises.

Anonymous said...

Elitism and a sense of entitlement has crept in to public service and selected talents believe they deserve their millions as much as they believe the bottom 20% of our society deserve their slide down to poverty.

Spot on! You have written in one sentence that summarizes the mentality of some online commentators.

Anonymous said...

May i quote WB:-

Warren Buffett:
{In looking for someone to hire, you look for three qualities: integrity, intelligence and energy," said Buffet. "But the most important is integrity, because if they don't have that, the other two qualities, intelligence and energy, are going to kill you."
"When you hire someone to run your business, you are entrusting him or her with the piggy bank," according to Buffett. "If these people are smart and hardworking, they are going to make you a lot of money, but if they aren't honest, they will find lots of clever way to make all your money theirs."

The rule is simple: People with integrity are predisposed to perform; people without integrity are predisposed not to perform. It is best not to get the two confused. Integrity is the key ingredient.
The lesson is simple: Having integrity is more important than being good at what you do.}

Unquote:
WB was referring to business hiring only. What can be greater at stake of a country when the people is "hiring" managers to run their country.
i suppose we can equate integrity of a manager to the amount of passion he has. As to how much to pay the manager with passion & capability, that is another dimension to consider.

Anonymous said...

"These high salaries along with corporate profits which are at historic highs as a percentage of GDP are build on top of low stagnant wages of the ordinary Singapore and the import of cheap labor from 3rd world countries that is pushing the bottom 20% of Singaporeans towards poverty."
Lucky Tan

The most amazing thing is that despite this, there are still at least 60% who are OK with it.

If I were PAP, why would I worry or care?

Or maybe some of the 60% did not know or read Lucky's blog.

Lucky, so you need to find a way to reach them, as blogs may not be effective.

Anonymous said...

No matter how articulate Lucky Tan's blog is, or how many readers and fans he has, I think PAP will not be worried if Lucky Tan remains just a blogger.

Anonymous said...

Even Tan Kin Lian who blogged for years, had millions of hits on his blog and had the largest crowd ever in Hong Lim Park, lost his deposit in the Presidential election!

Anonymous said...

Tan Jee Say publicly said he is OK with only $500K annual Presidential salary, yet he received only 25% of the votes in PE.

And PAP with million or multi-million salaries for ministers and President, won the GE and PE.

So who says voters not OK with million dollar salaries for ministers and President?

Anonymous said...

A solution is for GLCs to hire only real talents as senior executives instead of providing cushy jobs for scholars. This way, the scholars will find out that they arent particularly talented. Grace Fu was from PSA, so does she really think she can command the same pay in the real pte sector??

sgcynic said...

Two great articles I read today - they explain what is wrong with Singapore and the political system.

Completing the wage revolution by Ho Kwon Ping (Straits Times Review and Forum 17 Jan 2012)

Public policy, public opinion and the trust deficit by Cherian George
(http://journalism.sg/2012/01/17/public-policy-public-opinion-and-the-trust-deficit/)

Anonymous said...

"Grace Fu was from PSA, so does she really think she can command the same pay in the real pte sector??
Anon 17/1/12 10:20

But at least she can command enough votes to win a SMC, not GRC in last GE.

And with that, a million dollar ministerial job.

So don't say GRC, why can't the opposition, except Hougang SMC, win even in a SMC?

GRC is unfair to opposition, they say, but how come SMC is fair they also cannot win?

Anonymous said...

This is another major damage LKY has done to Singapore and Singaporeans. He has drastically changed the culture of the elites from one of honour and priviledge to one of greed.
The only man in Singapore who has the substance and moral integrity to change it back to one of priviledge and honour is Chen Show Mao. But time is not on his side. He must become the PM after the next GE to stop this rote which is every quickly devouring the integrity and character of our people and society.

Anonymous said...

"The only man in Singapore who has the substance and moral integrity to change it back to one of priviledge and honour is Chen Show Mao."
Anon 17/1/12 12:43

Only if WP is able to contest all seats in next GE.

Only if 60% willing to vote for WP.

And only if WP can win 93% seats.

If not, Chen Show Mao in 2016 will still be the Chen Show Mao in 2011, whatever his substance or moral integrity.

And PAP in 2016 will still be PAP in 2011.

Anonymous said...

Aiyah...dun cum here talk CB lah. Even your idol CSM also talk money. Going by WP recommendation...our PM still hit million dollar,which is still highest pay in the world lah.

they smart to start with base pay of MPs which land sweet sweet into their pockets hor.

Aiyah...no eye see laaah

Anonymous said...

want talk pay to attract ambiguous talent as defined by ambiguous talented leaders....isn't that the blind leading the blind?

most already accepted blindly this definition of leadership...no wonder pay so high lah

Anonymous said...

It is pointless to be debating all these. Just note down every single cent that they have taken.

When the PAP goes out of power, put each and every one of these scumbags on trial for stealing from the people. Make them pay back every cent that they have taken while in office.

Anonymous said...

If the govt is made up of people of substance, integrity and sincerity, it would put this issue to the people to decide in a National Referendum.

But, since we already know the calibres of the cabinet members, it is unlikely that that would ever happen, not with LKY around and LHL in charge.

Don't forget the two of them and many members of their extended family, including a late High Court judge actually ACCEPTED special HUGE discounts, to the tune of millions collectively from a condo developer from Indonesia.

Anonymous said...

"DPM Teo : Don't compare S’pore ministerial pay with other countries"

Of course. After all, he has a 60% mandate to say that. And pay the ministers accordingly.

Anonymous said...

60% knows and understands that it is important to pay ministers well.

If not, their quality and calibre may be much worse than they are now.

It's that simple. But what to do?

E said...

http://www.spp.nus.edu.sg/ips/docs/events/p2012/SP2012_Bkgd%20Pa.pdf

- Singapore Perspectives 2012 background paper

This is not directly relevant to this blog post but is certainly relevant to what Lucky Tan has been highlighting all this while. Hope Lucky Tan can give his insights on the ideas given by the paper. Thanks.

Anonymous said...

If the char kway teow is no good, even free I also don't want to eat.

Unless I very, very hungry lah, and there is no other better food available, so even lousy char kway teow at $20 a plate I will still buy. No choice what.

Anonymous said...

khay khiang..deserve to die LOL

runroad said...

Anon 17/1/12 10:15:

And PAP with million or multi-million salaries for ministers and President, won the GE and PE. So who says voters not OK with million dollar salaries for ministers and President?

If that is the case and they have nothing to fear then why have a salary review culminating in a pay cut? Like to lose money for fun, izzit?

Anonymous said...

GE 2016
This is the time to give PAP politicians another pay cut.

But for now.
Let us all keep quiet and let PAP wayang this pay review through Parliament.

The power is in the vote.
So keep persuading your friends, family and relatives to vote wisely in GE 2016.

Anonymous said...

pap leaders are mediocre but when compared to Chen Show Mao, they are like shits. Chen Show Mao has set a very high standard. For him to give up his multi$million income and at the top of his career to serve Singaporeans is one of the most noble move I have ever seen in the politics of Singapore. It even exceeded LKY and GKS entry into politics.

Anonymous said...

What about the ministers who have recently stepped down. They draw a pension equivalent to a third of their last drawn salary.

Question is should their pensions be reduced accordingly too.

We could have a situation where retired ministers earn more than a current serving minister!

Anonymous said...

Look at the way the PAP Ministers defend their high pay so passionately, there is no hope they they will allow their pay to be cut to a comparable level found in other countries. For decades, the PAP has been treating the tax-payers as their ATM with no regard to the views of the tax-payers. Since they are in power, there is nothing voters can do to stop them. If citizens feel that their performance cannot measure up to the high pay they are earning, then % votes for PAP in 2016 election will definitely fall further

Anonymous said...

Vote which pfarty? The next best pfarty...the WP pfarty? Some of their MPs can't even speak properly and those who spook better...recommended equally high pay for political office holders.

Change means from one pfarty elitist rule to the next pfarty?

Well, you can smell all the fart you want but prease don't call that change.

Anonymous said...

"Gerald Ee and his committee try to solve PM Lee's problem by not going too low on ministerial salaries. Ee said he went around asking his friends and they told "under 1 million, don't bother me". "




It just means these friends of Ee's does not have the calling and should not be in public service, period.

Anonymous said...

It will be interesting to know whom have Ee asked for the view of how much ministers here to be paid?

How could Ee base on his friends to determine that less than a million is no go? This is totally fraud. A referendum will be accurate. But PAP will never allow a referendum on anything especially pay matter because they know very well the result will be a big NO from Singaporeans even though 60% are still daft and selfish in GE2011.

icedwater said...

Let's not put all our hopes on one man. We need the system to change. The whole world went dreamy-eyed when Obama with all his promises won the Seat in 2008, but what happened after that we all know. One Chen Show Mao cannot make Singapore a better place, we need all of us working together to make our home better!

Anonymous said...

"We should be asking ourselves how even ended up with this problem and why 4 decades with the scholarship system in place and sending thousands of our best minds overseas to the best universities has resulted in a dearth of good dedicated political leadership willing to serve without such sky-high salaries."

These scholars are being highly rewarded @ public expense from the start of being smart & talented in clocking academic brownie points.

This constant accumulation of brownie points through some self-serving matrix designed by themselves has to be sustained in order to validate / perpetuate the circular myth of talent (the expectation of being highly rewarded for their past track).

They may have forgotten that many lay people outside the scholarly paradism are looking at real value-addition in their onw lives e.g jobs, costs of living like HDB prices, cpf withdrawal, etc.

Anonymous said...

When the best that the PAP recruitment system can throw up is kee chiu, TPL, tuck you, vivain, Ng EH and Sham, you know the system is finished. On the other hand the future of the oppositions is looking bright.

Anonymous said...

I would say it's pointless to say or complain abt anything if u cant come up with a formula for the ministerial pay that u are satisfied with, supplemented with empirical support.

Anonymous said...

Don't compare salaries???... incompetent fools! Then why are they comparing their salaries with the private sectors top earners?

Anonymous said...

See exactly what government ministers in Singapore really have to do . There are other people looking after the running of this very small city , so what have they really to do which justifies such salaries . Singapore government salaries are a laughing stock worldwide, and have tarnished the reputation of the country , especially seeing the current set of infrastructure problems and citizens opposition to government policies , especially immigration .

Sabrina Chocron said...

Salary offered in one country may not be necessarily sufficed to sustain in another country. Individuals in big number relocate to another country for work assignments, sometimes for better growth prospects every year, with some of them fear cost of living crisis.

Anonymous said...

The Singapore government is the laughing stock of the world. One of the smallest countries , yet the highest salaries ( + Bonuses)

Anonymous said...

If their salaries etc are linked to good government and running a country well . Then with the current problems in public transport , overpopulation , excessive prices for houses , vehicles , water & electricity , it can hardly be called successful , ye salaries are never reduced when things go badly .