Straits Times, Jan 6, 2012
Insight looks through records of parliamentary debates to find out when ministerial pay first became a contentious issue, and how the debate has shifted over the years
By Andrea Ong
1970
MINISTERS' salaries are raised for the first time in independent Singapore, from $2,500 a month to $4,500.
Their wages were previously frozen to set an example of wage restraint for other Singaporeans in the young country.
Prime Minister Lee Kuan Yew tells Parliament that the salaries are being raised because he wants to appoint newly elected MP Hon Sui Sen, who used to head the Development Bank of Singapore, as the Finance Minister.
Earlier that year, Law Minister E.W. Barker had asked to leave politics as he could not afford his mortgage, which was based on his former income as a lawyer.
It is 'not fair' and 'unrealistic' to ask ministers to earn a wage 'out of all proportion to what they were earning outside the Government and whose family needs are also pressing', says Mr Lee in Parliament.
Also, it will be impossible to attract men of integrity and ability to become ministers with the existing pay once the current ministers leave office.
His own pay will, however, remain at $3,500 to demonstrate his commitment to the policy of no wage increases without productivity growth, he says.
1972
The National Wages Council (NWC) is formed and recommends the payment of the Annual Wage Supplement - the '13th month bonus'. It is adopted by the civil service and political appointment holders. One reason cited is to reduce the gap between public and private sector pay.
1973
First substantial wage increase for ministers and civil servants. Mr Lee's monthly pay goes from $3,500 to $9,500, while ministers' monthly pay rises from $4,500 to $7,000.
This kicks off a series of periodic pay increases for ministers and civil servants in subsequent years.
1981
By March this year, ministers' monthly pay has increased to $11,500. Mr Lee's pay is now $16,500.
Mr Lee notes in Parliament that times have changed since the 'revolutionary conditions' of the 1950s and 1960s, when people were more willing to sacrifice for their ideals and ministers could be recruited from both Singapore and Malaya.
Said Mr Lee: 'Now, our selection is confined only to Singaporeans. This makes it all the more crucial that some six to 10 of the best in the professions, from banking, and from industry, be recruited into the political leadership. Otherwise the Cabinet will simply not be equal to the more complex tasks of government.'
1985
During an extensive debate on ministerial salaries, Mr Lee introduces another reason for paying ministers a reasonably high sum: to keep Singapore's political leaders clean and corruption-free.
He was responding to Workers' Party (WP) MP J.B. Jeyaretnam's charge that ministers here were paid much more than their counterparts in Malaysia, Australia and Britain.
Mr Lee argues that ministers do not get hidden perks, unlike those in other countries. The clean wage paid to them helps preserve Singapore's 'most precious asset': an administration that is corruption-free.
Says Mr Lee: 'I am probably the highest paid in the Commonwealth if you go by official salary. But I am probably one of the poorest in the Commonwealth... I am one of the best paid and probably one of the poorest of the Third World prime ministers.'
Mr Lee says he has been a 'kept man' all his years in public service, with his wife and three brothers in the private sector all earning more than he does.
Mr Lee also challenges Mr Jeyaretnam, who earlier called for ministers to have a sense of proportion, to say by how much he would cut the total ministerial wage bill of $4.66 million.
To the reply of at least a third, Mr Lee retorts: 'So it will go down to $3.1 million... And then we all become honour-able men who have suddenly sacrificed ourselves for duty and public service. Let us have a sense of proportion.'
1989
Ministers' pay rises to a gross monthly sum of $28,644. The prime minister's gross monthly pay is $49,608. Variable bonus is raised by half a month. A performance bonus of up to two months' pay is introduced for the first time.
Also for the first time, the Government introduces 'make-up pay' to attract talent from the private sector. When such people join as new ministers, they can be paid up to 90 per cent of the difference from their old wage for up to two terms of office. This draws much criticism from MPs.
The policy has never been applied.
1993
An impending pay rise for ministers is announced in December.
Prime Minister Goh Chok Tong tells Parliament that while he cannot pay ministers what they would earn in the private sector, the pay must still be such that the younger generation would consider it worth sacrificing their previous comforts and privacy for.
He is already finding it increasingly difficult to persuade talented individuals to become ministers, he says.
While acknowledging the political cost of the pay increase, Mr Goh said: 'If we do not pay ministers adequately, we will get inadequate ministers. If you pay peanuts, you will get monkeys for your ministers. The people will suffer, not the monkeys.'
1994
After the pay increase kicks in, ministers' gross monthly pay is $64,000, and Mr Goh's, $96,000.
In January, Senior Minister Lee Kuan Yew proposes a formula to peg ministers' pay to private sector incomes. Such a formula removes the need to justify pay revisions every few years as adjustments based on income tax figures could be made automatically each year.
'Ministers' pay will then go up or down with the private sector, and never get seriously out of line,' said Mr Lee.
In October, a White Paper on 'Competitive salaries for competent and honest government' is presented to Parliament.
It proposes a benchmark which sets a junior minister's pay at two-thirds the average principal income of the top four earners in six professions: bankers, accountants, engineers, lawyers, local manufacturing companies and multinational companies.
The one-third discount would be a 'visible demonstration of the sacrifice involved in becoming a minister'.
Three days of intense debate follow. Many backbenchers, including People's Action Party (PAP) MPs Wang Kai Yuen and Tan Cheng Bock and opposition MP Ling How Doong, express discomfort with putting a price to public service as ministers are not the same as top private sector earners.
Opposition MP Chiam See Tong and Nominated MP Walter Woon argue that ministers should be paid enough to lead a comfortable lifestyle but should not compete with top earners. Mr Chiam suggests a monthly pay of $50,000 for ministers.
1995
In January, an independent panel sets the prime minister's pay at twice that of the most junior minister - a rule of thumb still in place today. Mr Goh, who earns $1.15 million a year, would see his pay increase to $1.6 million.
He also decides to forgo any salary increase for himself for five years.
In October, Dr Tony Tan returns to Cabinet as deputy prime minister and labour minister after having left in 1991 for OCBC Bank. He declines Mr Goh's offer of make-up pay, saying: 'I think that there has to be a financial sacrifice when one goes into the Government. I don't think that it is conscionable for me to expect the Government to pay me what I'm now getting at the bank.'
1997-1999
Asian financial crisis. Ministers' pay is frozen even though the benchmark rises. They take an extra pay cut in 1997 when employers' Central Provident Fund (CPF) contribution is slashed from 20 to 10 per cent to keep the economy competitive.
2000
Extensive revision of the salary structure for ministers and civil servants. Junior ministers' pay lags behind at just 10 per cent of the benchmark. The benchmark itself is found to be too narrow and unrepresentative.
The benchmark for a junior minister's pay is changed to two-thirds of the median income of the top eight earners in six professions.
The new formula considers a broader sample - the top 48 earners instead of the previous 24. And to avoid being skewed upwards by a few extremely high earners, it uses median instead of average income and only considers half of the stock options awarded to the top earners.
The previous fixed salary points for ministers are converted to salary ranges. Junior ministers are now appointed at the MR4 range, a system still in place today.
The variable component of ministers' pay is increased from 30 to 40 per cent. This way, a larger part of a minister's pay will depend on his performance and the state of the economy, said Deputy Prime Minister Lee Hsien Loong.
For the first time, a new gross domestic product-related bonus of up to two months is introduced under the ministers' variable pay. It will later range from zero to six months.
The performance bonus of ministers also rises to five months' pay, from an average of four months' pay.
However, the President, Prime Minister and Senior Minister remain at fixed salary points and receive fixed bonuses.
After the revision, the Prime minister receives a yearly pay of $1.94 million and a junior minister, $968,000.
Again, the topic is hotly debated in the House. Many MPs criticise the timing of the raise, which comes after a transport fare hike and when workers' CPF cuts have not been restored.
Mr Chiam repeats his 1994 call for moderation and a monthly salary of $50,000 for ministers - enough to pay for a bungalow, servants, two cars, annual holidays and their children's education.
2001-2006
Ministers' salaries are cut twice, once in November 2001 after the 9/11 terrorist attacks, and once in July 2003 after the Sars outbreak. They are restored in 2004 and 2005.
2007
Another salary revision. Ministers' pay now stands at only 55 per cent of the benchmark, and the Government moves to raise it to 73 per cent by the year end.
The variable portion of ministers' annual pay rises to 47 per cent - nearly half of their annual package.
The traditional car allowance is scrapped, but performance bonus is increased to a typical seven months, up from five months before.
The GDP bonus is also raised. It can now range from zero to eight months.
An acrimonious debate ensues in the House. Some PAP MPs say the raise is only pragmatic, while others like Ms Denise Phua and Mr Lim Biow Chuan argue in favour of the spirit of public service.
WP Non-Constituency MP Sylvia Lim says the average worker's monthly wage would be earned by ministers in two to three hours.
WP MP Low Thia Khiang argues that other countries like Finland and Denmark pay their ministers much less but do just as well as Singapore.
Minister Mentor Lee Kuan Yew rises for the first time in two years to rebut, saying that Mr Low's comparisons are not valid. Singapore's transformation from the 1960s to now 'requires an extraordinary government with extraordinary government officers to support it'.
And if Singapore did not believe in investing in top talent for its ministers, it might have ended in tatters: 'Your apartment will be worth a fraction of what it is. Your jobs will be in peril, your security will be at risk and our women will become maids in other people's countries.'
After the revision, junior ministers earn $1.59 million. The Prime Minister earns $3.09 million, up from $2.46 million. However, Prime Minister Lee Hsien Loong declares that he will donate the increase to charity for the next five years.
2011
Ministers' pay in 2010 stood at 67 per cent of the benchmark after planned increments were deferred due to the 2009 financial crisis.
About 40 per cent of their pay is variable. Performance bonus can range from zero to 14 months, while GDP bonus varies from zero to eight months.
The issue of political salaries is a contentious one in the May general election and even in the August presidential election, when two of the four candidates pledge to donate part of their pay to charity if elected.
On May 21, PM Lee Hsien Loong announces that he has appointed a committee to review political salaries.
This week, the committee, headed by Mr Gerard Ee, releases its recommendations in a report titled 'Salaries for a capable and committed government'.
It proposes changing the benchmark formula for a junior minister to 60 per cent of the median income of the top 1,000 earners who are Singapore citizens.
The discount and sample size are bigger, and foreigners and PRs are excluded from the benchmarking sample.
The variable component in pay has been slashed to prevent large swings from year to year. The performance bonus is now smaller - up to six months instead of up to 14 months.
The GDP bonus has been scrapped. In its place is a National Bonus of up to six months which considers four indicators - economic growth, real income growth rates for average and poor Singaporeans, and unemployment.
The Prime Minister's salary has been slashed by 36 per cent to $2.2 million, while a junior minister's pay has been cut by 37 per cent to $1.1 million.
The report will be published as a White Paper and debated in Parliament on Jan 16.
andreao@sph.com.sg
ATTRACTING TALENT
In 1970, then Prime Minister Lee Kuan Yew told Parliament ministers' salaries were being increased because he wanted to appoint newly elected MP and ex-Development Bank of Singapore head Hon Sui Sen as the Finance Minister. It was the first time since 1955 that ministers' salaries were raised.
'If we do not pay ministers adequately, we will get inadequate ministers. If you pay peanuts, you will get monkeys for your ministers. The people will suffer, not the monkeys.'
Then Prime Minister Goh Chok Tong addressing Parliament in 1993, when a pay rise for ministers was announced
KEEPING SINGAPORE CORRUPTION-FREE
'I am probably the highest paid in the Commonwealth if you go by official salary. But I am probably one of the poorest in the Commonwealth... I am one of the best paid and probably one of the poorest of the Third World prime ministers.'
Then PM Lee Kuan Yew said this in 1985 in response to Workers' Party MP J.B. Jeyaretnam, who had charged that ministers here were paid much more than their counterparts in other countries like Malaysia, Australia and Britain. Mr Lee said Singapore ministers did not get hidden perks, unlike those in other countries, and the clean wages paid to them helped keep the administration corruption-free
BIGGER VARIABLE
In 2000, the variable component of ministers' pay went up from 30 to 40 per cent. This way, said then Deputy Prime Minister Lee Hsien Loong, a larger part of a minister's pay would depend on his performance and the state of the economy.
CALL FOR FIXED PAY
In 2000, opposition politician Chiam See Tong called for a monthly salary of $50,000 for ministers - enough to pay for a bungalow, servants, two cars, annual holidays and their children's education.
[Feb 5 Update: Just read this Petition or movement to hold the pay of the US congress if they do not pass the annual budget. In the last 14 years, the US congress has passed the budget on average 4 months late. That's average. So there have been years when it has been later than 4 months! Unbelievable.]
Insight looks through records of parliamentary debates to find out when ministerial pay first became a contentious issue, and how the debate has shifted over the years
By Andrea Ong
1970
MINISTERS' salaries are raised for the first time in independent Singapore, from $2,500 a month to $4,500.
Their wages were previously frozen to set an example of wage restraint for other Singaporeans in the young country.
Prime Minister Lee Kuan Yew tells Parliament that the salaries are being raised because he wants to appoint newly elected MP Hon Sui Sen, who used to head the Development Bank of Singapore, as the Finance Minister.
Earlier that year, Law Minister E.W. Barker had asked to leave politics as he could not afford his mortgage, which was based on his former income as a lawyer.
It is 'not fair' and 'unrealistic' to ask ministers to earn a wage 'out of all proportion to what they were earning outside the Government and whose family needs are also pressing', says Mr Lee in Parliament.
Also, it will be impossible to attract men of integrity and ability to become ministers with the existing pay once the current ministers leave office.
His own pay will, however, remain at $3,500 to demonstrate his commitment to the policy of no wage increases without productivity growth, he says.
1972
The National Wages Council (NWC) is formed and recommends the payment of the Annual Wage Supplement - the '13th month bonus'. It is adopted by the civil service and political appointment holders. One reason cited is to reduce the gap between public and private sector pay.
1973
First substantial wage increase for ministers and civil servants. Mr Lee's monthly pay goes from $3,500 to $9,500, while ministers' monthly pay rises from $4,500 to $7,000.
This kicks off a series of periodic pay increases for ministers and civil servants in subsequent years.
1981
By March this year, ministers' monthly pay has increased to $11,500. Mr Lee's pay is now $16,500.
Mr Lee notes in Parliament that times have changed since the 'revolutionary conditions' of the 1950s and 1960s, when people were more willing to sacrifice for their ideals and ministers could be recruited from both Singapore and Malaya.
Said Mr Lee: 'Now, our selection is confined only to Singaporeans. This makes it all the more crucial that some six to 10 of the best in the professions, from banking, and from industry, be recruited into the political leadership. Otherwise the Cabinet will simply not be equal to the more complex tasks of government.'
1985
During an extensive debate on ministerial salaries, Mr Lee introduces another reason for paying ministers a reasonably high sum: to keep Singapore's political leaders clean and corruption-free.
He was responding to Workers' Party (WP) MP J.B. Jeyaretnam's charge that ministers here were paid much more than their counterparts in Malaysia, Australia and Britain.
Mr Lee argues that ministers do not get hidden perks, unlike those in other countries. The clean wage paid to them helps preserve Singapore's 'most precious asset': an administration that is corruption-free.
Says Mr Lee: 'I am probably the highest paid in the Commonwealth if you go by official salary. But I am probably one of the poorest in the Commonwealth... I am one of the best paid and probably one of the poorest of the Third World prime ministers.'
Mr Lee says he has been a 'kept man' all his years in public service, with his wife and three brothers in the private sector all earning more than he does.
Mr Lee also challenges Mr Jeyaretnam, who earlier called for ministers to have a sense of proportion, to say by how much he would cut the total ministerial wage bill of $4.66 million.
To the reply of at least a third, Mr Lee retorts: 'So it will go down to $3.1 million... And then we all become honour-able men who have suddenly sacrificed ourselves for duty and public service. Let us have a sense of proportion.'
1989
Ministers' pay rises to a gross monthly sum of $28,644. The prime minister's gross monthly pay is $49,608. Variable bonus is raised by half a month. A performance bonus of up to two months' pay is introduced for the first time.
Also for the first time, the Government introduces 'make-up pay' to attract talent from the private sector. When such people join as new ministers, they can be paid up to 90 per cent of the difference from their old wage for up to two terms of office. This draws much criticism from MPs.
The policy has never been applied.
1993
An impending pay rise for ministers is announced in December.
Prime Minister Goh Chok Tong tells Parliament that while he cannot pay ministers what they would earn in the private sector, the pay must still be such that the younger generation would consider it worth sacrificing their previous comforts and privacy for.
He is already finding it increasingly difficult to persuade talented individuals to become ministers, he says.
While acknowledging the political cost of the pay increase, Mr Goh said: 'If we do not pay ministers adequately, we will get inadequate ministers. If you pay peanuts, you will get monkeys for your ministers. The people will suffer, not the monkeys.'
1994
After the pay increase kicks in, ministers' gross monthly pay is $64,000, and Mr Goh's, $96,000.
In January, Senior Minister Lee Kuan Yew proposes a formula to peg ministers' pay to private sector incomes. Such a formula removes the need to justify pay revisions every few years as adjustments based on income tax figures could be made automatically each year.
'Ministers' pay will then go up or down with the private sector, and never get seriously out of line,' said Mr Lee.
In October, a White Paper on 'Competitive salaries for competent and honest government' is presented to Parliament.
It proposes a benchmark which sets a junior minister's pay at two-thirds the average principal income of the top four earners in six professions: bankers, accountants, engineers, lawyers, local manufacturing companies and multinational companies.
The one-third discount would be a 'visible demonstration of the sacrifice involved in becoming a minister'.
Three days of intense debate follow. Many backbenchers, including People's Action Party (PAP) MPs Wang Kai Yuen and Tan Cheng Bock and opposition MP Ling How Doong, express discomfort with putting a price to public service as ministers are not the same as top private sector earners.
Opposition MP Chiam See Tong and Nominated MP Walter Woon argue that ministers should be paid enough to lead a comfortable lifestyle but should not compete with top earners. Mr Chiam suggests a monthly pay of $50,000 for ministers.
1995
In January, an independent panel sets the prime minister's pay at twice that of the most junior minister - a rule of thumb still in place today. Mr Goh, who earns $1.15 million a year, would see his pay increase to $1.6 million.
He also decides to forgo any salary increase for himself for five years.
In October, Dr Tony Tan returns to Cabinet as deputy prime minister and labour minister after having left in 1991 for OCBC Bank. He declines Mr Goh's offer of make-up pay, saying: 'I think that there has to be a financial sacrifice when one goes into the Government. I don't think that it is conscionable for me to expect the Government to pay me what I'm now getting at the bank.'
1997-1999
Asian financial crisis. Ministers' pay is frozen even though the benchmark rises. They take an extra pay cut in 1997 when employers' Central Provident Fund (CPF) contribution is slashed from 20 to 10 per cent to keep the economy competitive.
2000
Extensive revision of the salary structure for ministers and civil servants. Junior ministers' pay lags behind at just 10 per cent of the benchmark. The benchmark itself is found to be too narrow and unrepresentative.
The benchmark for a junior minister's pay is changed to two-thirds of the median income of the top eight earners in six professions.
The new formula considers a broader sample - the top 48 earners instead of the previous 24. And to avoid being skewed upwards by a few extremely high earners, it uses median instead of average income and only considers half of the stock options awarded to the top earners.
The previous fixed salary points for ministers are converted to salary ranges. Junior ministers are now appointed at the MR4 range, a system still in place today.
The variable component of ministers' pay is increased from 30 to 40 per cent. This way, a larger part of a minister's pay will depend on his performance and the state of the economy, said Deputy Prime Minister Lee Hsien Loong.
For the first time, a new gross domestic product-related bonus of up to two months is introduced under the ministers' variable pay. It will later range from zero to six months.
The performance bonus of ministers also rises to five months' pay, from an average of four months' pay.
However, the President, Prime Minister and Senior Minister remain at fixed salary points and receive fixed bonuses.
After the revision, the Prime minister receives a yearly pay of $1.94 million and a junior minister, $968,000.
Again, the topic is hotly debated in the House. Many MPs criticise the timing of the raise, which comes after a transport fare hike and when workers' CPF cuts have not been restored.
Mr Chiam repeats his 1994 call for moderation and a monthly salary of $50,000 for ministers - enough to pay for a bungalow, servants, two cars, annual holidays and their children's education.
2001-2006
Ministers' salaries are cut twice, once in November 2001 after the 9/11 terrorist attacks, and once in July 2003 after the Sars outbreak. They are restored in 2004 and 2005.
2007
Another salary revision. Ministers' pay now stands at only 55 per cent of the benchmark, and the Government moves to raise it to 73 per cent by the year end.
The variable portion of ministers' annual pay rises to 47 per cent - nearly half of their annual package.
The traditional car allowance is scrapped, but performance bonus is increased to a typical seven months, up from five months before.
The GDP bonus is also raised. It can now range from zero to eight months.
An acrimonious debate ensues in the House. Some PAP MPs say the raise is only pragmatic, while others like Ms Denise Phua and Mr Lim Biow Chuan argue in favour of the spirit of public service.
WP Non-Constituency MP Sylvia Lim says the average worker's monthly wage would be earned by ministers in two to three hours.
WP MP Low Thia Khiang argues that other countries like Finland and Denmark pay their ministers much less but do just as well as Singapore.
Minister Mentor Lee Kuan Yew rises for the first time in two years to rebut, saying that Mr Low's comparisons are not valid. Singapore's transformation from the 1960s to now 'requires an extraordinary government with extraordinary government officers to support it'.
And if Singapore did not believe in investing in top talent for its ministers, it might have ended in tatters: 'Your apartment will be worth a fraction of what it is. Your jobs will be in peril, your security will be at risk and our women will become maids in other people's countries.'
After the revision, junior ministers earn $1.59 million. The Prime Minister earns $3.09 million, up from $2.46 million. However, Prime Minister Lee Hsien Loong declares that he will donate the increase to charity for the next five years.
2011
Ministers' pay in 2010 stood at 67 per cent of the benchmark after planned increments were deferred due to the 2009 financial crisis.
About 40 per cent of their pay is variable. Performance bonus can range from zero to 14 months, while GDP bonus varies from zero to eight months.
The issue of political salaries is a contentious one in the May general election and even in the August presidential election, when two of the four candidates pledge to donate part of their pay to charity if elected.
On May 21, PM Lee Hsien Loong announces that he has appointed a committee to review political salaries.
This week, the committee, headed by Mr Gerard Ee, releases its recommendations in a report titled 'Salaries for a capable and committed government'.
It proposes changing the benchmark formula for a junior minister to 60 per cent of the median income of the top 1,000 earners who are Singapore citizens.
The discount and sample size are bigger, and foreigners and PRs are excluded from the benchmarking sample.
The variable component in pay has been slashed to prevent large swings from year to year. The performance bonus is now smaller - up to six months instead of up to 14 months.
The GDP bonus has been scrapped. In its place is a National Bonus of up to six months which considers four indicators - economic growth, real income growth rates for average and poor Singaporeans, and unemployment.
The Prime Minister's salary has been slashed by 36 per cent to $2.2 million, while a junior minister's pay has been cut by 37 per cent to $1.1 million.
The report will be published as a White Paper and debated in Parliament on Jan 16.
andreao@sph.com.sg
ATTRACTING TALENT
'If we do not pay ministers adequately, we will get inadequate ministers. If you pay peanuts, you will get monkeys for your ministers. The people will suffer, not the monkeys.'
Then Prime Minister Goh Chok Tong addressing Parliament in 1993, when a pay rise for ministers was announced
KEEPING SINGAPORE CORRUPTION-FREE
'I am probably the highest paid in the Commonwealth if you go by official salary. But I am probably one of the poorest in the Commonwealth... I am one of the best paid and probably one of the poorest of the Third World prime ministers.'
BIGGER VARIABLE
In 2000, the variable component of ministers' pay went up from 30 to 40 per cent. This way, said then Deputy Prime Minister Lee Hsien Loong, a larger part of a minister's pay would depend on his performance and the state of the economy.
CALL FOR FIXED PAY
[Feb 5 Update: Just read this Petition or movement to hold the pay of the US congress if they do not pass the annual budget. In the last 14 years, the US congress has passed the budget on average 4 months late. That's average. So there have been years when it has been later than 4 months! Unbelievable.]
No comments:
Post a Comment