Salaries for a Capable and Committed Government

Debate resumed.

4.28 pm

The Prime Minister (Mr Lee Hsien Loong): Mr Speaker, Sir, we have discussed the issue of Ministerial salaries many times over the years in this House and it is always a very difficult and very emotional issue, for completely understandable reasons. First, because you are talking about pay, which is always sensitive. Second, you are talking about significant amounts of money especially as it would appear to the ordinary man-in-the-street – millions of dollars. And thirdly, because you are talking about what elected Ministers are earning; representatives of the people, serving their people and being paid out of the taxes of the people. So, it is a subject on which people have strong views – strong views not only on what is the "correct" and "incorrect" salary, but strong views on what is right and fair for Ministers to be paid and whether the basis is proper and legitimate.

Page: 958

One of the reasons the debate is never finally settled is because there are two radically different approaches to this problem.

One, as argued by the Workers' Party, at least in principle, though not in their sums, that public service is its own reward. People entering public service should not even think about the pay, and all the sacrifice and hard work will ultimately benefit the general good of the public, and that by itself should be greater satisfaction than any salary package.

The alternative view is that we should pay whatever is necessary to assemble the best team for Singapore. To consider the difficulty and the importance of the job of Ministers, to think what quality of people we are looking for to be Ministers, and to look at what capable Singaporeans are earning in the private sector and pay commensurately to get the best team possible for Singapore.

So, an idealist approach versus the pragmatic one. And each has its merits. Neither can be pushed to its limits and the key is to find the right balance between these conflicting considerations, the right combination of idealism and pragmatism and a formula that will work well and that our citizens will accept.

And it is vital for us to get a pay system which works for us. Because this is not just about how much money Ministers will get, but it is about Singapore's future. It is about ensuring that Singapore always has a good government, leaders who care for our people and our country, who have strong abilities to carry out the responsibilities of Ministers and to have more than that, the character to handle pressure and the mettle to provide steady leadership in a crisis. If we can get that right, then we can protect what we have achieved and build better lives for all. If not, then the little dot will become the little black spot.

I have been involved in this issue for many years, first helping Mr Lee Kuan Yew and Mr Goh Chok Tong build their teams of MPs and Ministers: meeting people, interviewing people, trying to persuade people to come in. As a Minister and Deputy Prime Minister, I have also been working on successive salary revisions. And now as Prime Minister, I am focused on assembling the best team to run Singapore today and sustaining the system for the long term, for the future.

The overriding priority is to build the best team for Singapore and we are looking for the most committed and able people to serve with an unwavering commitment to their country, with a passion to serve Singaporeans and the aptitude for politics, a feel and a care for people and able to get a good sense of the ground and what people need and how to look after these needs. We also want high ability and potential because we are looking for a good MP but also for much more than a good MP. The search process is extensive. You have read about it in the newspapers, we have talked about it – tea sessions trawling systematically for potential talent. But beyond the general trawl, we also go rifle shooting. Talent spotting individuals, specifically seeking out people with the abilities, with the right combination of background and skills and aptitudes to be potential office-holders because we found from experience that if you just do a general trawl, you do not catch the whales.

Page: 959

We are looking for Singaporeans in their prime – 30s or early 40s. Because we want people who are still young, still flexible, able to learn what the job involves, having the best years of their lives ahead of them, able to have a long runway in order to master their job, to get the feel of it and to serve, and serve in their prime years when they have energy and vigour, when they can connect with the younger generation, when they still have time to build bonds with Singaporeans, with the grassroots, with fellow politicians. And eventually become good Ministers while they are still vigorous and have energy to do things for Singapore.

If you look at my present office-holders, ask yourself: whom have we brought in, from where? We have got several from the private sector. We have brought in Shanmugam, top lawyer, he was an MP for many years, eventually we persuaded him to come in in his late 40s at the peak of his earning powers, when he took a very substantial pay cut to come in, even to our pre-committee salaries.

Dr Ng Eng Hen, a very successful surgeon, also coming in with a significant pay cut. Gan Kim Yong in NatSteel, previously in the Administrative Service; Grace Fu in PSA. People successful, proven, now making a leap into what for them must be an uncertain new path and not just their career, but their mission. In Cabinet, they are all making a far bigger contribution than they were making in any of their previous jobs. But in Cabinet, they are all earning much less than they were before they entered politics. I wish I could find more of them. I have not succeeded. I did not find it easy and I will not find it easy either.

Others have come in from the public sector, from the civil service, from the SAF: Teo Chee Hean, Tharman Shanmuguaratnam, Lim Hng Kiang, Lim Swee Say, Khaw Boon Wan, Heng Swee Keat and many other younger ones brought in this recent general election. Had they stayed on either in the civil service or the SAF, they would most probably have risen high and gone far. We looked for the most promising ones, and we raided the civil service and the SAF knowing that they would leave the service weaker, but understanding that unless you have a good government and a good set of Ministers, however strong your civil service is, it is not going to be able to perform. And we have to make this balance and take this choice, and take them out. And now they are in and making bigger contributions to Singapore.

Of course, the talent pool was there in the first place because the civil service pays properly from junior officers all the way up to the Permanent Secretary. And had the civil service not paid properly, I think we would have lost many good officers to the private sector long ago. For both those coming in from the private sector, and the civil service and SAF, these were very tough decisions. For the private sector, you are coming in from a career where you are known, where you are doing well, where you have your network, you are on the up, and if you stay on, you know what you are going to do. It is not just the earning power, it is also the excitement, the challenge, the success, the thrill of being at the top of your career and your profession. You come in, you may succeed, you may fail. You cannot say for sure because however successful a person is in the private sector, public service as a Minister is a different proposition. You need different aptitudes, different skills. If you do not have the right touch and you do not transfer from being a specialist doctor to being a policy-oriented Minister, whatever your psychomotor skills, whatever your many years of learning and experience, it has gone to waste.

Page: 960

And you cannot go back to the private sector and rejoin your profession. Five years later or 10 years later, you are not as young, five more years of bright young people have come along, filled up the places, taken your clients or patients, and when you go back out, you are in a different path. So, it is an irrevocable change of course. And, of course, there are family and privacy considerations as well, especially if your family is still young. How will they be affected? Will I have time for them? Can they cope? Will their financial prospects be affected if I come in because I have to calculate the implications?

Similarly, for those from the public sector. In a way, it is easier because policy-wise, they have been working on policies, contact-wise, they probably have more contact with the Ministers so they know what the Ministers are doing and the Ministers know what they are doing, but for them also it is a one-way ticket because they have to resign from the public service. You go out, it is diving into the ocean. The Chinese say "下海", meaning the private sector but here you are diving into the ocean, into politics. And, likewise, no assurance of success because writing policy papers for a Minister is quite different from standing up in Parliament and expounding and defending and persuading and carrying a policy which you have had to take the lead to set and to work out. If it does not work, they also have to start afresh, completely new in the private sector somewhere. Those who come into politics but did not become Ministers straightaway – and sometimes that happens – have immediately to find new jobs outside of Government and make a living for themselves.

So, it is not a simple matter to come in from the point of view of their own calculation, from the point of the responsibility which they are taking on. It is not a simple matter either because you are going to be, as a Minister of State or Minister, responsible for the futures, the lives, the security, the prosperity, the education of several million Singaporeans. And if you are not up to it, several million people are going to suffer the consequences, quite apart from any mortification or embarrassment which you may feel. But the responsibility which you are taking on to you, to do this on behalf of Singaporeans. If you do not pause and take a deep breath and think it over for several days, you are not fit for this job.

So when people say, come in, I have the passion, I will proceed. If only life were so simple and passion was sufficient for everything. You need the passion, but you also need to be circumspect to think and consider carefully: am I up to it? Can I really make that contribution? Therefore, you are not talking about huge numbers of people, you are talking about a few dozen possibilities in Singapore, finally when they boil it down in each election, we have never brought in more than six or seven.

I have never discussed salaries with the potential candidates who are coming in either from the private sector or from the public sector because if money had been their principal consideration, we would not even have fielded them as MPs, much less appointed them as Ministers. But I asked them to join politics because they have the right values, because they were capable, and I believe that they could make meaningful contributions. And they agreed to come in because they wanted to serve and after searching their souls and consulting their families, they felt: Yes, I think I can make a contribution.

Page: 961

I do not believe that salaries were a make or break issue for any of them who have come in. But I have no doubt that proper salaries have made it easier for me to build the team which I have today and to provide the best service which we can to Singaporeans to govern the country. But I also recognise that there were others too who might have been able to contribute but who declined when I asked them. They cited desire for privacy or they may say, "Sorry, politics is not for me" or they say, "Thank you very much, I will contribute but I will find my own ways to do it." Nobody will ever say, "Sorry, the pay is too low", but we need to be honest with ourselves. For some of them, it must have been a consideration, especially the younger ones with young families and young children. And when they say, "I don't mind but my husband is not keen or my wife is not keen", well, we know how to interpret what it means. Because even if they do not worry for themselves, they must think about the financial impact on their spouses and children, and they must think what their responsibility is to their family and to provide the best they can for their family and what the impact would be in terms of exposure and in terms of normal life as well as financially.

So far, I have been more successful bringing in people from the public sector than the private sector. Partly as I said, because the civil servants are more familiar with policy. But also it is more difficult for the private sector to adjust, to come in and to be a Minister because there is a greater difference between Ministerial and business or professional skills sets. From being a surgeon to being a decision maker. From a lawyer arguing a case for your client to being a Minister, deciding what are the right laws which should prevail in the land. And to change from being a very successful lawyer or banker, to being a very successful Minister is not so easy.

But the Minister's job is as demanding, as important and as consequential as any private sector job, and requires people of the same quality as the private sector job and better.

There is one more factor, of course, and that is that the civil service pay, while competitive, is not quite as high as the private sector pay. So, when the civil servant comes in, the impact financially is not so great. But even then, when I bring in a senior officer like Heng Swee Keat, he will take a substantial cut, and now, with this recommendation, a further reduction. It is not a light decision to bring in somebody like Heng Swee Keat from the civil service. He has been a Permanent Secretary, he was Managing Director of Monetary Authority of Singapore – he was responsible for the whole financial system and financial sector in Singapore, one of our top Permanent Secretaries. If he had not come in to politics, every chance of becoming Head of Civil Service. It is a big sacrifice for the civil service to lose a person like that. It is a significant sacrifice to him to come in from where he was and the grade he was, which he fully justified to start as a new Minister at the bottom and work his way up. But I was fortunate, I talked to him. Last time, he was not ready – children still young. This time, he was ready – he proceeds – and, fortunately, I have now got a good Minister for Education. But can I do that a dozen times and get 12 such people into my Cabinet? If not, how do I fill the Cabinet? How do we make sure that it is just not education but defence, transportation, national development, foreign affairs – the whole range – are all staffed with top quality people?

Page: 962

Paying people correctly is part of that answer. Not the whole part, but part of the answer. And I have been involved with pay as well as salaries for a large part of my working career. My first involvement was in the SAF in the 1980s. I was in the general staff and the Government was planning a major increase of salaries proposed. I think Mr Goh Chok Tong was then the Defence Minister, and we discussed it. I think it was about 20% to 25% increase for the officers, and I argued against it because I thought it was too much, too fast. There was no need to be so generous and perhaps to change the spirit of the service. But that was my perspective, which changed over the years.

Later, when I came into Parliament, I watched how Mr Lee Kuan Yew argued and defended the policy of paying realistic wages to Ministers. I remember particularly in 1985, during the Budget, Committee of Supply, when there was a full debate with Mr J B Jeyaretnam. Mr Low Thia Khiang was not yet in Parliament, but it was Mr Jeyaretnam and Mr Chiam. Minister Mentor, or then Prime Minister, came with a stack of papers and did battle. He never looked at the papers but for three hours, he argued, explained, made the case with Jeyaretnam, with Chiam See Tong, with several other MPs participating, in a way which only Minister Mentor can do. Why this is being realistic, why you have to be honest and not hypocritical about this matter, why it is necessary to have the best man to be the Chief Justice, to be Judges, to be the Attorney-General, to be Permanent Secretaries and Ministers, and how important it is to do that right rather than argue over a few million dollars of salary. But even Minister Mentor, after three hours of a bravura performance, could not settle the matter permanently. It is not possible, and every few years we came back to it, and each time we have to argue the matter again.

In the early 1990s, I was Deputy Prime Minister and in charge of the civil service, Public Service Division. And I saw how, at that time, with rapid economic growth and rapid increases in salaries, civil service pay and remuneration were lagging behind the private sector, and the service was rapidly getting depleted. Young officers were leaving, paying up their bonds or leaving soon after their bonds, not waiting to be underpaid in their 40s, but calculating ahead that by the time I am 40, I am going to be behind. I am now 30, this is my moment to make the move. And people calculating even ahead of that.

The civil service put up a proposal to make a 5% or 10% pay revision. I told them it was unrealistic, we have a serious problem. We have to move drastically on pay, we have to move drastically on promotions. Because if every time I pay faster, I promote slower, you will end up going nowhere, and that was the problem because of the system then, without personnel boards. I was convinced we needed a major revision. And so in 1993, we made major revisions to the pay for Ministers, for the civil service, especially at the Administrative Service and the Legal Service. At the same time, we came up with this idea that you are going to have this problem repeatedly over the years, the arguments remain the same, we should settle the argument, try and make a benchmark and then we just follow the benchmark. If it goes up, we go up. If it goes down, we go down. And the logic remains the same. The formula has been agreed, the calculation – that is a matter of arithmetic.

On that basis, we published our White Paper in 1994 and introduced the idea of a formula. And the formula was two-thirds of the average of the top 24 people in six professions – two-thirds average 24. Later on, we modified it and made it two-thirds of the average or the median of the top 48 people in the same professions. And over the years, we made successive revisions to improve the scheme to adapt as circumstances change, and each time we explained fully in Parliament and to the people of Singapore what we were doing. It is really above board, completely open, fully argued. And Mr Low Thia Khiang was here for many of those and we engaged on this issue repeatedly.

Page: 963

We applied this principle of benchmarking not just to the Ministers, not just to the Administrative Service, but throughout the civil service and the SAF. So it is officers, soldiers, policemen, teachers, nurses, administrators, clerks. Every level, what could you earn in the private sector, what can you earn in the public sector, we will try and match that, but always lagging a little bit because we do not want to set the pace. We want to be lagging. But we made sure it is competitive, and this led to major salary adjustments. For the teachers, one year, we made a 30% increase, and then we followed that with successive adjustments over the years. Had we not done that, we would not have the civil service we have today. We would not have teachers who are good graduates, we would not have principals who are in their late 30s, early 40s, vigorous. We would not be able to staff our hospitals and healthcare system. We would not have people in every department on top of their job, thinking what to do next, what to do better.

But the process is never over and it continues today because if private sector moves, we have to continue to move. And the Legal Service, we continually are under pressure because in the private sector, lawyers' earnings are going up. Doctors and nurses, the private sector is doing very well. There is a review going on for doctors and nurses. MOH is making their case to the Ministry of Finance. All and other departments and other services too. All these are continuing revisions which are necessary and, in the same way, Ministerial pay also has to remain competitive and realistic as circumstances change.

But for many Singaporeans, Ministerial pay remains an issue. Some of them disagree with the principle of looking at the private sector or some of them may have reservations about the formula which we have set, whether it is too narrow, whether you are looking at the wrong group of people, whether it is stable enough, what if the group changes. Many technical arguments can be rehearsed. Some people just feel that the salaries are just too high. Whatever it is, that is too much and less is better. Others may be unhappy that the Ministers have to take the responsibility to decide their own salaries rather than have somebody else impartially deciding it for them. And then there are the concerns that highly paid political leaders would lose the ethos of caring for Singaporeans first as their main motivation and priority, and may lose touch with the problems which average families with average incomes feel. So, all these came to a head in the General Elections in 2011. And I would say that these are, in principle, reasonable concerns. No government can function unless it is functioning and serving the interests of its electorate and Singaporeans. But in Singapore, the PAP's track record of Government can stand up to scrutiny. Bonus or no bonus, year in, year out, we have looked after the interests of all Singaporeans, especially the poor, which is how we have got here today, as Mdm Halimah Yacob reminded the House just now.

But these are not issues easily settled in the heat of a campaign, and we certainly do not want an auction to the lowest bidder. People saying, "I will serve for less" and the other person, "I will serve for even less". And you think that if you choose the cheapest one, you will get the best value for money? It has to be considered carefully and thoroughly with Singapore's best interest at heart, and then we reach a judicious decision which will serve Singapore well for the longer term.

Page: 964

Therefore, after the General Election, I appointed Mr Gerard Ee to head a Committee. He put together a competent and respected team with broad experience. They consulted widely, they analysed the issues thoroughly and from a fresh perspective, and they have submitted, what in my view, is a well-judged report. In terms of quantums, there is a major reduction, more than one-third reduction for Ministers, no more pensions, the formula is changed. But it reflects the Committee's judgement of the right balance between paying competitively to assemble a good team and setting a reasonable discount for public service – to recognise public and, particularly, political service. This is significantly different from the balance which the Government set when we last revised the benchmark 12 years ago. But the situation has changed. Since then, we appointed the Committee, we accept their judgement and we will work on its basis.

But equally important as a formula and a number, the Committee reviewed and reaffirmed the fundamental principles for setting salaries in the public sector. They examined many alternatives during the consultation, considered them all carefully, but ultimately decided that the basis should be what Singaporeans can earn in the private sector, include a discount to recognise that this is political service in the interest of the nation, and to pay a clean wage.

In other words, the Committee reaffirmed the basis on which the Government has been working all along, although with a new formula and a bigger discount. And I am encouraged to see that the Workers' Party also accepts these basic principles, although they have a different formula and a different notion of what the numbers should be in the same ballpark as what the Committee has recommended. But of course slightly lower because having looked at the Committee's report, they decided as the Opposition party, surely they must recommend something a bit less. But my Government accepts the Committee's recommendations. We will do our best to make it work. I hope the public will accept the Committee's proposals as fair and right for the future.

Why is pay such a critical issue? Because pay goes to one of the core requirements for Singapore – to assemble the best team to serve Singapore. And if you have the wrong system of pay, you will have the wrong team. And as the Prime Minister, this is my constant worry.

I am less concerned about the impact of the salary revisions on my present team of Ministers. They have come in, they have committed themselves. They are in for the cause. This pay cut is not going to affect their dedication to serve. But my bigger concern is for the long term, for future Cabinets and potential office holders. People who have not yet come in, people who must make that decision and that commitment. Can the future Prime Minister continue to get the best and most committed people to serve as his Ministers? In fact, can we get the best possible future Prime Minister for Singapore? How can our pay system support this important goal? And if we have a pay system which supports this, how can we get Singaporeans to accept that?

The ethos of service is critical if you are coming into politics. Ideally, we should take public service as being inherently different from the private sector. Public service has its own rewards and we just set salaries sufficient to support Ministers at a reasonable standard of living, independent of what the private sector earns. And there is no shortage of talent. Bigger monetary sacrifice will not deter more public-spirited Singaporeans from serving. In fact, some people have argued that the bigger sacrifice will encourage more public-spirited people to come forward.

Page: 965

I respect this view but even though in our hearts we would wish and hope that it were true. In reality, we know it is not so simple. Our own experience and the experience in other political systems provide a reality check. Yes, there will be always some able Singaporeans who are willing to serve regardless of the terms. And we treasure people like that, and when we find them, if they are suitable, we field them because they are very special. But will there be enough of them to produce a whole team of Ministers, a whole of Cabinet, equal to the task and with the standards which we have come to expect? And can we afford to risk the future of the country on the assumption that there is no trouble, we will find them, salaries do not matter? From my experience working with the system, I know it is not so easy. We are talking about a small group to start with and every additional hurdle you put, every additional burden on the step forward to come in, you make it more difficult and you narrow your choice.

Even without competitive pay, some people will come forward. Those who do not care about money and they are doing good work. You see them at charities, you see them at the VWOs, some are in religious service. I think our society is the richer for them. We will be very much poorer without people like that. But they are not enough and not all of them have the combination of attributes and skills which we are looking for.

We will get people who come in with wealthy backgrounds, as Mr Alvin Yeo pointed out yesterday – happening in other countries where politics is dominated by those who can afford to participate and not to be paid. Like in America, where many of the politicians are of means, they are not poor people – Mitt Romney, billionaire many times over; Michael Bloomberg made his fortune. If you are not rich, you are not likely to be running for President. Even Barak Obama who came from humbler backgrounds is not a poor man. And so too, in UK, where the Cabinet is a cabinet of wealthy people, as Mr Alivn Yeo pointed out.

We will also get people who have been successful in their careers, who have become financially secure and who are now at a stage in their lives when they are ready to do public service. They will come in. We had Dr Richard Hu who served with distinction many years ago. We have Shanmugam come in as a lawyer in his late 40s and there will be others, too. And I see on the Opposition side, Mr Chen Show Mao has come in, aged 50 after a successful career. Now he is ready to do public service.

Yes, we can find people with this background who have been successful and are now ready to make a career switch and do pro bono work. But they will be older, 50-plus years old. They can serve one, two terms and if the whole Cabinet is 50-plus years old, I think it is going to be a less future-oriented Cabinet, less energetic, less in touch with the new generation. We want people who are younger, who are vigorous, for whom this is not just something you do after you have done other things in your life but the main commitment for the prime years of your working life.

We have nothing against Singaporeans who have wealthy backgrounds or who have made a successful private sector career. They will have meaningful contributions to make or they may have meaningful contributions to make but we cannot afford to have our whole system based on this. We need a mix of talent, different ages and backgrounds, people who represent the diverse needs and aspirations of our population. And to do that, you need to have a proper system. As Ms Denise Phua acknowledged yesterday with a regretful tone but she has run a VWO; she has herself gone in and committed herself, running Pathlight. She recounted her experience gathering a team for Pathlight School. She can persuade her banker to switch over and do this work for the love of it but she could not assemble a whole team of volunteers who did not need a salary. She needed to take a pragmatic approach and we need to have that pragmatic mindset too.

Page: 966

Overall, our approach has worked well for Singapore. It has enabled us to assemble a strong and committed team. We have governed effectively, cleanly and fairly. We fostered a harmonious multi-racial society and we have improved Singaporean lives and transformed Singapore from third world to first. Whether you are a wealthy person, whether you are professional, whether you are low-income Singaporean, your life today is better than it was 10 years ago and totally different from what it was one generation ago.

And as a result, Singapore and Singaporean Ministers have earned respect and esteem worldwide. Singapore stands high. When people look for models of what to emulate, where are the solutions, where are the ideas. They look to Singapore; whether they are looking at traffic; whether they are looking at healthcare; whether they are looking at housing; whether they are looking at clean and efficient government. And they look at Singapore Ministers also with healthy respect. As Mdm Halimah reminded us, Deputy Prime Minister Tharman is chairing the International Monetary and Financial Committee. It is the main Committee of the IMF. What rights have we Singapore to be there chairing the Committee? We are not just a traffic policeman inviting people to speak. You are there because you have views, you understand the issues, you have a contribution to make. Therefore, you are respected and people are happy to work with you because you can help them to solve their very difficult problems.

So, the system has worked, has worked well. I am not saying it is perfect. Ministers make mistakes, the Government sometimes makes mistakes. We always try to do better but overall, this is the system which has worked for Singapore. Getting the best possible leadership for Singapore is vital for us because Singapore is different from other countries. Our survival and success will always be based on our ability to be extraordinary. We are a little red dot, unlike the US, even unlike Finland or Switzerland. No one owes us a living. If we run into trouble, we are not going to be as fortunate as Greece or Portugal. There is no EU to be the uncle. You are on your own.

And we have to protect ourselves in a turbulent and uncertain region. Hong Kong is as small as us, about the same population. Hong Kong always has big brother on the other side – one country, two systems. China is there, and China will take care of them. Switzerland and Belgium – small countries. They make do with either invisible or low-key government. Belgium went without a government for about 500 days. Switzerland, Ministers take turns to lead the government and the country runs itself because it is in the middle of Europe and nothing can go wrong.

But we in Singapore are not like that. We are young, multi-ethnic, always needed to change directions, to think, to fly faster, higher, lower, different angle, different route because we are in a different situation. And therefore, we will always need a highly competent government to make up for our other disadvantages, to run a high-functioning system whose sum is more than the parts which make it up, to constantly adjust to changes and to meet the needs of our population, including the lower-income group. It has been so up to now and I think it is going to continue to be so in future, in a more challenging external environment.

Page: 967

Nevertheless, some people still argue that we can follow other countries, how they pay their Ministers. Let us look at that – many alternatives to choose from and the Workers' Party, somewhere in their documents and their pronouncements also take this line. But we are different from them because our situation is different. We are different from them because we have set an approach to public sector, public service and to government and to remunerating government which is different from the approach they have taken. They have gone for complicated wages. We have gone for clean wage. They have gone for wages, in many countries, which bear no relation to the private sector. We have decided we have to be realistic. We have to look and see what it is which Singaporeans can earn, what it is which is necessary to make this system work.

They have their problems. It is not that other countries do not have problems and we can just take out what they are doing and all will be well. We are not trouble free but I think we avoid many of the problems which they have. You see the financial scandals, not just in emerging markets countries, not just in the third world. You see frequent resignations when things go wrong with Ministers. You see unstable governments. Italy has had one government every 18 months since the War. That means, over 60 years, they have had about 40 governments. Japan has had six Prime Ministers over the last five years, roughly. I may have lost count but they are talking about those orders of magnitude.

And foreign leaders in fact, often privately admit to us that they wish they could have followed us. Unfortunately, their politics do not allow them to follow us, in the way we deal with the public sector and with Ministers' pay. Foreign visitors tell us the same, how impressed they are with our Ministers; how they impressed they are with our system. I have had many foreign visitors who tell me, "Your Ministers are different and I have worked with Ministers in many countries and I have not met a team like your team."

Another visitor told me after the Elections, "Don't change your system." We look at other this big Asian country and he named. He says the Ministers are paid nothing but every single one of them is at least worth $200 million. They know it because they see working here. Therefore, they invest. Therefore, they have faith in us. Therefore, Singaporeans benefit from this reputation and this confidence which the world has in Singapore.

So Singapore is different from them. I do not need to go into details but I will just skim through quickly. You look at the US – the President is paid less than me. Yes. And the last time I had the revision, the newspapers reported a certain anonymous high level resident of the White House saying that he wished he was paid the same. But the high level resident of the White House travels in Air Force One, lives in the White House, vacations at Camp David. And after they retire, they earn many times their salaries. All they have to do is to turn up for an appearance, make a few remarks, a hundred thousand dollars a time.

In three years, George Bush has earned US$15 million since retiring; Bill Clinton who retired a decade ago has earned US$75 million. His fees are about US$200,000 each time. And it is not just the President, but it is a revolving door system for many of their top officials. People who come in, serve a short while, go back out and often go back out to be lobbyists and consultants or to serve in the industries and businesses which relate to what they were working on when they were inside – whether it is defence, whether it is communications, whether it is energy. And so, you lead to conflicts of interests. And so, you lead to problems when you are not quite sure whether the policy is "straight" or not "straight". Why is he doing it? Dick Cheney had to answer many questions because he used to work in petroleum, he became Vice President, he has gone out, he has links with big companies. So when he makes decisions and Haliburton benefits, many questions are asked, fairly or unfairly.

Page: 968

Britain has the same challenges. Low official salaries topped up by generous benefits. Just now, Mr Faisal Manap says, "Well, because they live in London. That's why they are given these benefits". That is the explanation. The reality is they are given these benefits because they could not be given the pay and so it was presented as benefits and the understanding was these are claims you can make and so long as you submit some piece of paper, well, we would pay the claims. Because this is just a way to work the system so that you can be paid what you really truly need to be paid. And the MPs took it literally. They submitted claims for maintaining the swans in their ponds, for cleaning up the moat of their castle. Somebody submitted the claim because he was watching some exciting movie in his home. And when all these came out, there was a humongous scandal and they have to chop all that down. And now they have a very serious problem because now they cannot pay MPs via this route, neither can they raise the MPs' allowance because MP's standing has sunk rock bottom in people's esteem.

And now, with austerity, with the economy doing badly, David Cameron recently proposed to make Ministers pay more for their pensions so they have to deduct more for their co-payments to show solidarity with the people because people are suffering from spending cuts. One of his Ministers accused him of "jester politics"; and another Minister said "We all know what sort of earning potential Cameron will have after he leaves office and it won't be small." And in fact, you have seen former politicians in Britain leaving office who had gone in to subsequent careers and it has become controversial because they have to earn a living for themselves and the question is: how are they doing it?

So, other countries are different. We have deliberately not followed that model. I think we should not follow that model. Good government is going to remain critical to Singapore in future. This is not just during the first phase, as we take off, you need a strong government, after that, you can fly on auto-pilot. In fact, I think in the next phase, we will need even more skilled pilots. We face important domestic challenges: sustaining growth in a more mature economy; maintaining security in a volatile and uncertain world; strengthening our social bonds and our racial harmony in a society which is becoming more diverse.

Domestically, it is complex; externally, it is challenging. We see the competition from China and India and it is not just at the bottom. We see the fragile global economy and that is not going to be secured within one or two years. We see the trends in technology, eating into middle-class jobs, white-collar jobs and we ask ourselves: how do we avoid this tsunami, where can we find high ground to shelter and to protect our people? None of these can be done on auto-pilot. We need a government which will constantly be able to adapt, to respond, to seek new opportunities, while it is addressing the challenges in front of you. And if you want an example of a country which is on auto-pilot and when the auto-pilot does not quite solve the problem, you look at Japan. Very advanced country, very strong civil service, highly qualified civil servants Рmany from Tokyo University, Todai, the cr̬me de la cr̬me, but with a dysfunctional political system Рunable to have a strong government with the Permanent Secretary knowing more than the Minister and Ministers changing frequently, sometimes within days of taking office because they misspeak, they resign, new Minister comes along; infinite supply but infinite confusion.

Page: 969

And the deeper lesson of that is that however strong your civil service, without good Ministers, the civil service cannot act. Because governing a country is not a matter for technocrats, it is a matter for political leaders who will decide, who will persuade, who will carry the ground, who will set the direction and who will make things happen. And if the Minister cannot sell the policy, your Permanent Secretary may be first-class, the policy cannot fly. So it is quite useful to have smart, very good Permanent Secretaries and civil service, but to believe as Mr Chiam See Tong used to believe that if you have a good civil service, you do not need a good government. That is just plain wrong.

I do not see it likely that we are going to find it easier to get good Ministers in future. I think the contrary is the case. First of all, Singapore politics is beginning more complex, more uncertain; it is not a sure ride, it is not a career move; you can lose and even if you win, the job of politics – persuading people, arguing with people, dealing with the brickbrats – is a lot more complicated than before. On the other side, there are many more exciting career opportunities available for able and ambitious young Singaporeans here and abroad.

In the early 1990s, when I was worrying about the civil service brain-drain, we were only concerned about the civil servants going out into the private sector in Singapore – maybe one or two will go to Hong Kong or the region. Today, the world is your oyster. You go to an Ivy League University, you are targeted by recruiters in your first year. You spend time in Silicon Valley; one internship; at the end, you are good, they make you an offer. You go to New York, Wall Street – you do not have to go – if you are good, somebody will pass them your name, the recruiter will come to look for you, interview you, make you an offer. Free T-shirts are the least of the benefits they give you. And it is tremendously exciting – round, worldwide opportunities. It is exciting not because of the pay. It is exciting because these are young people who think that they are going to change the world. And when we say, "Come back, change Singapore, that is as important and challenging", they will say, "Well, I'll think about it".

So in that situation, I think it is going to take a lot of persuading to get young people to give up these opportunities and enter politics, whatever Ministers are going to get paid. And if the pay is not competitive, then there is just another obstacle to people who have got something valuable to add to Singapore. Grace Fu was completely right in this point when she posted on her blog to say that this salary revision is okay but if you go too far, I think there is going to be a problem for many Singaporeans. She got flamed online, but she was right and she was honest to point this out. Singapore has to maintain a high quality of government otherwise we are going to go back down and we are going to be a mediocre country. I have said this many times, I think, perhaps, it has not been completely understood but certainly it is not completely believed, but it is absolutely true. We are different and because we are different and exceptional, therefore Singaporeans have reaped a Singapore dividend – not something which the Minister for Finance distributes during Budget but a Singapore dividend by virtue of your carrying a pink IC and therefore your value in the world has gone up. You are in demand. People want to hire you, opportunities are opened. When you go places, your standing is there. Doors open and people know of Singapore and people have high regard for Singapore.

Page: 970

I was at the APEC meeting in Honolulu last year in November and I met some young people from the National Youth Council. There was a young people's gathering on the side of the APEC meeting and we sent a delegation – seven of them, university students, some postgraduates – bright, young, idealistic, seeing the world almost for the first time. And one girl said to me that she was astonished at how high Singapore's standing was, how much respect people had for Singapore. She never realised that. I said, "Please go home and tell your friends", because in fact, this is an important fact and this is something which is precious and which we must not compromise and lose. Because if people stop having that opinion of Singapore, I think we are in trouble. So I cannot send all our bright young students to Honolulu but I think we need to know that while we have reasons to be dissatisfied and to want to do better, in fact, we have not done badly, and we should be careful not to lose what we have already gained.

One important argument that people have raised is accountability. Since Ministers are paid well, so they have to be held accountable to perform. I would say "Yes, Ministers have to be held accountable". But I would say the Ministers have to be held accountable, whatever they are paid – whether you are paid $1, whether you are paid a million dollars, whether you are paid $10 million. You are the Minister, you are serving the people, you have to perform to the best of your ability. We are elected by Singaporeans. It is our duty to uphold the trust which they have reposed in us and to serve them the best that we can. And if we are unable to perform to their expectations, then we have to give way to a better person, or to a better team. And as Prime Minister, my responsibility is to ensure that individually, each Minister performs up to expectation and collectively the Cabinet delivers the best Government for Singapore. So my duty is to set objectives for Ministers, assess them, hold them to account and to do this carefully and comprehensively; to take into account, not just what the Minister does in his main portfolio, but also his broader contributions to our overall team and to Singapore. And it is not always possible to reduce this to a simplistic formula or to a finite set of KPIs which you can just measure the numbers and then calculate the bonus. Because Ministers have responsibilities in many dimensions, often intangible ones, for example, building the SAF and Home Team is the work of more than a generation. So is keeping Singapore safe from terrorism.

When a new Minister comes in and takes over and the performance is good, it is maybe his good work, it is maybe his predecessor's good work. We are safe today, we have not had war for the last 30 years, but we have been preparing the SAF, building up our security, making sure that we are safe for longer than 30 years. So what the Minister does today is not measured in tomorrow's output or even next year's output but in the results – 10, 20, 30 years from now, if he is doing a good job.

Same in education. Not just providing school and university places today, but building an educational system that prepares students to work in the economy of the future. When will I know that our Ministers have done a good job? When today's 15 year-olds are 55 and still working 40 years from now. So if we talk about deferred bonus, I would have to defer Heng Swee Keat's bonus for 40 years.

Same with national development. Building public housing. Yes, everybody knows how to count: how many HDB flats are completed last year. But also planning the city, conceiving a new Marina Bay, creating green corridors and spaces all over Singapore. You put that into a KPI? So many kilometres, so many new Marina Bays, so many new IRs – cannot be done.

Page: 971

A good Minister does not just do and fulfil what the Prime Minister tells him to do. A good and entrepreneurial Minister expands the scope of his responsibilities, imagines things which he could do and embarks on projects which nobody asks him to, but which turn out to be good ideas and deliver outstanding results for Singapore. So, it is not possible to have a preset formula to determine the performance bonus. The national bonus, yes, and that is about half of it. That is about the same size as the performance bonus. That you can measure – GDP, median income, 20th percentile income, unemployment. For these, the Department of Statistics can churn out the numbers. But the Minister's responsibility, his core responsibility as well as his broader responsibility and contributions, that cannot be reduced to a formula.

Finally, it is a judgement I have to make after consulting my senior colleagues and to decide who has made the greater contributions, who has been the more effective Minister. Not every Minister is equal. The Ministers know it, the public knows it. And we have our own relative assessments, the public have their own relative assessments and sometimes the public is not shy to tell us what they think. They may or may not be right, but different Ministers have different contributions, in terms of their responsibilities, in terms of their abilities, in terms of their judgement and the ability to work in a crisis. Therefore, the Ministers need to be at different grades and be paid different performance bonuses. But they are all part of one team, and each one has a contribution to make so that the team as a whole functions well. I have to decide the Ministers' performance bonuses and grades.

I have circulated the table showing you what the Ministers' grades are currently: Two Deputy Prime Ministers, one Minister on MR3, 10 Ministers on MR4 and I also give the grades for the Ministers of State and the Parliamentary Secretaries. So, presently, nearly all the Ministers are on MR4 because the Cabinet is still new, it is really in transition, still settling in. But I expect in the steady state, to promote more Ministers to the higher grades and to build a strong team which will comprise three tiers of Ministers across the different grades in Cabinet: The newer Ministers who are being developed for heavier responsibilities in future, the more experienced Ministers overseeing major Ministries or areas of work and then the senior Ministers, I do not mean senior Ministers as a title but Ministers who are more senior, who help me coordinate more than one Ministry and oversee whole-of-Government issues. So, there will be a hierarchy, but, together, we are a team. And the Ministers who do well will get heavier responsibilities and may get promoted.

So, Singaporeans have to evaluate the Ministers fairly. And they have to take into account both the contributions and the shortcomings, and you have to look at it objectively and holistically because quite often, contributions may be silent. But when something goes wrong, it goes wrong with a bang. We must try to keep that perspective.

If the Ministers make mistakes, then, of course, they must take responsibility and put things right. We cannot expect the Ministers to never make mistakes or never to have mistakes happen on their watch in their Ministries. It is not possible, this is a very big organisation and it is a very complicated world and with the best intent in the world, from time to time, things will go wrong. And when things go wrong, you have to put them right. And if it is your responsibility, you have done it wrong, then you apologise and you answer for it.

Page: 972

If a Minister is negligent or dishonest, then, of course, he has to be sacked. I have not had to do that, but if a Minister does not perform well despite all his best efforts, then I may move him to a less demanding portfolio where he is able to perform or, if necessary, I may have to phase him out discreetly. It is not always visible, but it is necessary to do and it is necessary to understand why not everything can be done in the full glare of the spotlights.

Apart from mistakes from time to time, not every person who comes into Government will succeed as a Minister. It is a difficult job. You never know until you are in it whether it will work or it will not work, and sometimes you have to give it a try. I can make two types of mistakes. I can put in somebody and it did not work, or I may decide I do not want to try somebody and he could have been a good Minister. So I think I have to accept that when people come in to be Ministers, sometimes it does not work out, in which case I need a graceful way to disengage and part amicably.

Exits are delicate matters, and they have to be handled with dignity and decorum, and the Ministers, too, are deserving of dignity and decorum. You cannot turn this into a public spectacle and have it deter more good people from entering politics. So, this is how all organisations handle personnel changes, and we have to do this with the Ministers too. I hope Singaporeans understand this.

Ultimately, the accountability is not individual Ministers. The accountability is the Cabinet, collectively responsible for what we have decided and what the Government does. All Ministers are collectively responsible for the Cabinet decisions, whether it is building houses, whether it is building train lines, whether it is setting taxes, whether it is setting immigration policies. That is the doctrine. It is a collective responsibility. All Ministers are party to this and all Ministers are held to account ultimately when next we go to General Elections (GE) and the public is the final judge of the Government's record. I hope that when we go to elections, we will have a good record and the voters will assess the Government fairly, based on overall results for the whole term. That is how a democratic system has to work, and to work well, it depends on the Government performing well and it depends on the electorate making the right judgements.

I do not expect this speech to be the last word on Ministerial salaries, but it is my responsibility as Prime Minister to tackle this very difficult issue, to find and prepare the best possible team of Ministers for Singapore and the best next team to take Singapore forward. To do that, it is not just a matter of drinking more tea or meeting more people, but putting in place the right system, the right framework, the right structure, and that is the pay system and the pay structure to help the next team succeed and to find more people.

So, I hope Singaporeans will understand this bigger picture, will know that getting in the right leaders who are passionate, committed and have the right values is key to their future and to do that, you must have the pay system right.

It is very hard for a new Prime Minister to do this, so Mr Lee Kuan Yew tried his best to clear the decks before Mr Goh took over. I think Mr Goh did all he could to put it on as sound a position as possible before he handed over to me. And I have to do my part to try and make it work in a different environment for a new phase but looking forward beyond me into the next generation.

Page: 973

So, I am taking this on my shoulders, and I ask for your support to make the right decision for Singapore, and then we will have always capable, public spirited men and women in Government to serve our people and to secure our future for many years to come. [ Applause. ]

5.39 pm

Mrs Lina Chiam: Mr Speaker, Sir, after listening to the Prime Minister's speech, where he leaves no stones unturned in his explanation, since I have prepared the speech, I might as well read it. [ Laughter. ]

On the Ministerial Pay Review Committee headed Mr Gerard Ee, I have only two major points to make. My priority in Parliament remains to be on sustainable economic growth and healthcare costs. My remarks in Parliament, including this statement, are ultimately geared towards speaking up for Singaporeans in these areas. My first point relates to the formula of pegging the Ministers' base pay to 60% of the median income of the top 1,000 Singaporean income earners. Mathematically, it is not clear how the salaries will go from here. Yes, this is a huge cut from now but there is a possibility that the new formula may even result in a higher base pay than what the old formula could provide on a long-term basis. There are many ways that the median pay for the top 1,000 earners can rise substantially in the next five years. Wealthy foreign business people could be given Singaporean citizenship en masse . It could even be that the median pay for this group will rise much faster than the median of the top 48 earners. But for me to form a more accurate opinion, I would need to see how the old and the new formulas will apply to the period from the year 2000 to 2010 on a back-dated basis. To do so, the Government would have to provide us with these figures. More importantly, are the figures for the Ministers' bonuses as paid out each year according to the old and new formulas. If the Government and the Review Committee are truly serious about promoting a clean wage approach for Singapore Ministers, without additional perks and allowances, then they must follow through with a spirit of that approach. All this data on salaries and the specific amount of bonuses paid out each year must be published and made transparent for public scrutiny. To-date I believe such data is never released. In the UK, the Freedom of Information Act allowed for the release of details of MPs' expenses claimed for the British public in the year 2009. If we in Singapore want to talk about clean wages, let us all go the way: Publish the bonuses paid out every year. Mr Speaker, if the Government does not wish to follow the practices of Ministerial pay in other countries, may I remind that hon. Members of this House at least show some respect for our friends and neighbours and how they decided to remunerate their leaders in their own countries. Let us show some humility. We should not be telling them how to run their countries. There is no need to jeopardise our relationship with them.

My second point, in my opinion, is even more important for the good of Singapore. Ministerial pay should be primarily driven according to KPIs that are specific to their Ministerial portfolio. Each Ministry should create a set of KPIs for the Minister and the Minister's pay is to be objectively decided by a formula that is Ministry-specific. As a guide, the KPIs for the Permanent Secretary of the relevant Ministry as the most senior civil servant should be taken into account. Yes, I know that there is a performance bonus component which is rewarded based on the individual performance of Ministers. But it is not clear what the criteria are in attaining this performance bonus. The Review Committee's report says that the performance bonus' quantum will be reduced substantially. I am not sure whether the bonus formulas are well structured to drive Ministers towards fulfilling their portfolio's KPIs and for the purpose of accountability. The Committee recommended formula for the national bonus may be an improvement on the old GDP bonus formula. But it is still too broad. Some cynics have even speculated that the recommendation for the old formula to be changed has come at a time when Singapore's GDP growth will be slowing down. For example, the Minister for Trade and Industry's KPI for all his bonuses could be Singapore's wage growth. The Minister for Transport's KPI could be tied with the Minister for National Development's KPI to control population growth and thereby vehicle numbers.

Page: 974

Otherwise, the bonus structure will give me discomfort. For example, our transport system might be in disarray or a major terrorist might escape from prison but the Minsters responsible for these incidents may still collect a full national bonus, just because the economy has done well through the good work of other Ministers like the Minister for Finance and the Minister for Trade and Industry.

No, this cannot be good for Singapore and that brings me to the overarching point. If the Government's decision is still to match Ministerial pay to the top earners of the private sector, then their accountability measures and KPIs must also match the rigour of the public sector.

I turn the focus now to the junior Ministers' new recommended starting salary of about $1.1 million per annum, bonuses included. Mr Chiam See Tong once worked out what Ministerial pay should be, in order that the Ministers will still be able to enjoy a comfortable lifestyle with hardly any financial sacrifices. He calculated that the figure would be $50,000 per month, taking into account the mortgage and cost of a bungalow, or whatever residence, the hiring of servants, two cars, annual holidays and the children's education. This proposal was also supported by the then NMP Prof Walter Woon. At today's levels, the figure would be about $60,000 per month or $720,000 per year. That amount including bonuses would be a good benchmark to prove their worth for a young Minister with a young family. Moreover, they still have their MPs' allowances of $192,500 to top it up. This represents an approach that can be explained to Singaporeans and be accepted by them. For some of the new Ministers, this new salary could be much more than their last drawn salary. Moreover, there is no risk factor in the job like, for example, what the stockbrokers face.

Mr Lee Kuan Yew and the first generation of Ministers have set up the Government apparatus as it is today. Now our Ministers inherit this system and continue with their job and even enjoy the support of a credible and efficient civil service. Distinguished senior servants like Mr Ngiam Tong Dow had also played a major role in building our country.

When Mr Chiam See Tong was elected the MP for Potong Pasir back in 1984, people were afraid of associating themselves with him. His law firm began to suffer from a loss of business. He was ridiculed and mocked by various people for his involvement in politics. He was even at the receiving end of such comments from judges when he was simply doing his work in the Courts defending clients. But he never thought these as sacrifices throughout the years. He took it all in his stride. He saw it as part and parcel of his mission to fight for a democratic Singapore – a Singapore where no Singaporean is left behind.

Page: 975

I believe this is what being a servant leader entails. The spirit of public service is a calling, an honour, a privilege. It is something to be proud of. Nevertheless, I note that the Prime Minister's mandate for Mr Gerard Ee's Committee was bound to comparing Ministerial salaries to private sector salaries through the terms of reference. So that conclusion was already set before the Committee met, unfortunately. The Singapore People's Party pushed for a stronger public service ethos to be emphasised in any review on Ministerial pay but this Committee was just doing its mandated job. The Singapore People's Party wishes to thank Mr Ee and his Committee. [ Applause. ]

5.50 pm

Mr Zainal Sapari: Mr Speaker, Sir, our Prime Minister was right. He would not be the last one to speak on the issue, but how I wish he had been the last one. Our Prime Minister has explained very well the rationale and intent on the approach taken with regard to Ministerial salary. The independent Ministerial Salary Review Committee, headed by Mr Gerard Ee, has conducted a thorough review and made many recommendations.

Overall, I am in support of the recommendations but would like to suggest a minor tweak. Sir, I would like to focus on one significant recommendation which is the replacement of the GDP Bonus with the National Bonus. I support the recommendation to remove the GDP Bonus. Pegging the bonus of political office holders to the GDP has its inadequacies as the impact of national economic growth may not be equally shared across the board. The National Bonus is a more inclusive measure of how economic growth impacts Singaporeans, especially low- and middle-income Singaporeans. It moves away from merely taking GDP growth as an absolute and looking at it in a more holistic manner as the growth itself does not mean that everyone is better off as a result of it or has higher salaries.

On that note, I would like to propose that the indicator involving the real growth rate of the wages of the lowest percentile of Singapore citizens be given a higher weightage of about 40% to give greater emphasis on the importance of increasing the wages of this group of workers. Should this indicator be given 40%, the other three indicators should be given an equal weightage of 20% each. This is important as it will signal a greater need for emphasis to be placed on increasing the income of those at the 20th percentile of working Singaporeans as these people are the ones most in need of income growth. In fact, statistics have shown that incomes of those in the lower end of the strata have stagnated or seen very little growth over the last decade, even as our economy continued to prosper.

As a Labour MP, I would like our Government to send a clear signal that we are a caring Government which places low-wage workers as one of our top priorities. I acknowledge that our Government has tried through many ways to improve the lot of low-income workers, for example, through schemes like the Workfare Income Supplement (WIS). But more can be done by Government agencies and statutory boards to have a more systemic impact on raising the real income for low-wage workers.

We are aware that there are inflationary economic pressures and structural changes in business practices such as the practice of outsourcing and employing cheaper foreign workers that resulted in the real income of low-wage workers declining. Outsourcing practices for some jobs usually result in workers having low salaries and very limited employment rights such as they are placed on contracts. Sometimes, workers, especially in jobs like cleaning, securities and landscaping, work in the same place but keep having to change their employers as contracts are renewed. There have been cases where, due to a change in contracts, workers earn less doing the same job because the company or organisation had chosen a lower quote. Many of them do not enjoy any annual increment, or Annual Wage Supplement, or more commonly known as the 13th month bonus.

Page: 976

I hope my call for a higher weightage for this component of the National Bonus will result in a mindset change amongst our policy makers to take cognisance of the impact on low-wage workers in formulating and implementing national or Government policies. For a start, I think it is imperative that all Government Ministries, agencies and statutory boards review their outsourcing practices to ensure that they do not contribute to the plight of low-wage workers that I have described earlier.

In fact, in my maiden parliamentary speech, I called for the drive towards achieving sustained real wage growth for low-wage workers to be a Key Performance Indicator for every Ministry, Government agency, statutory board and social enterprise. We must do this as a shared national initiative to help our fellow Singaporeans. Increasing the weightage for real income growth for low-wage workers may tilt the balance of any policy impact in favour of this group of workers. I feel for the plight of these workers and we must show that our concern for this group of workers exceeds the others as low-income workers are the most vulnerable in our economy. This 40-20-20 formula I suggested might be the little push needed to get more attention being focused on the plight of low-wage workers. Mr Speaker, Sir, please allow me to address this issue in Malay.

( In Malay ): [Please refer to Pg 1000 for Vernacular Speeches.] Mr Speaker, I have called on the Government to raise the component that affects the income growth of low-wage workers when determining the National Bonus to 40%, and for the three other components, to 20% each. This is compared to the equal weightage of 25% for each component as recommended by the Committee.

I made this suggestion as this will send a signal that the move to increase the income of low-wage workers must be given priority in our efforts to assist Singaporeans.

Mr Speaker, many suggestions have been raised on using various formulas that can be used or different criteria to determine Ministerial salaries. The issue of Ministerial salaries is not just about figures or formulas but an emotive issue which is difficult to address fully. In any case, the Committee's recommendations had somewhat assuaged the dissatisfaction among the people but the debate on this topic will not end.

The motivation to serve in politics should not be based on money but the reality is that we want to attract the best talent. Not everyone is prepared to take such a big pay cut. If the salary is set too low, it will limit the number of talented individuals who will consider the offer to enter politics.

In my view, the Committee's recommendations are more comprehensive and it depicts the situation of the lives of Singaporeans. The proposal to review the Ministerial salaries every five years will give us more room to make adjustments based on factors affecting Singapore in the future.

Page: 977

( In English ): Mr Speaker, please allow me to conclude in English. Sir, with the salaries that we are according to our political leaders, what our political office bearers must do is to make sure that the outcomes of their work are of the highest standards possible. We must continue to do good work that will benefit all Singaporeans and in particular, make sure that those who are at the bottom rungs of our society move along and benefit from the country's progress. Our leaders must ensure that our policies continue to bring good economic development to Singapore and that while we prosper, we will look after the needs of the most vulnerable in our society and help them as much as we can. Sir, the late United States President, John F. Kennedy, once said, "If a free society cannot help the many who are poor, it cannot save the few who are rich". Sir, I support the motion.

5.59 pm

Mr Yaw Shin Leong (Hougang): Mr Speaker, Sir, in response to the Prime Minister, and hon. Members, Mr Vikram Nair, Mdm Halimah and for the benefit of all, I shall repeat the Workers' Party's position on this debate.

The Workers' Party does not endorse the White Paper on Salaries for a Capable and Committed Government. We reject the White Paper as the basis for the setting of salaries of political appointment holders because we are of the view that the formula used to derive the benchmark for Ministerial salaries is flawed. The basis of setting salaries benchmark based on the top 1,000 private sector income earners is unsound. The outcome of this formula based on the salary benchmark could potentially result in political appointment holders' salaries becoming outliers to the general wage level over time.

On the surface, the fixed monthly payout between the WP and the White Paper's positions may seem to differ little at this point of time. Yet it is a well-known fact that the top earners' rate of income will rise faster than that of ordinary Singaporeans, over time. Even though the entry level benchmark for the MR4 is $55,000 now, if it is pegged to the top 1,000 earners, we have estimated that it will increase by 51% by 2020. Under our WP's formula, our estimate is that the rate of increase will be about 41%, a more modest rate.

Also, for bonuses, the Committee's recommended maximum bonus is 13.5 months, whereas for the WP, we recommend not more than 5.5 months. This means in a typical bonus scenario, the Committee's proposed pay cut benchmarked against 2010 levels for MP, an entry grade Minister and the Prime Minister would be just 3%, 31% and 28% respectively. WP's proposed cuts would have been more substantial at 28%, 46% and 50% respectively. In a maximum bonus scenario, the Committee's proposed pay cut benchmarked against 2010 levels for MP, an entry grade Minister and the Prime Minister would be merely 3%, 8% and 5% respectively. Compare this to WP's proposed cuts which would have been consistently substantial at 28%, 37% and 42% respectively. The WP's proposed cuts in the MP's allowance and Ministerial salaries would result in savings of about $21 million in a conservative estimate of the typical bonus scenario. The savings could then be redirected to fund aids to our needy and elderly. Mr Speaker, Sir, in Mandarin, please.

Page: 978

( In Mandarin ): [Please refer to Pg 1001 for Vernacular Speeches.] My colleagues from the Workers' Party have elaborated on the Party's view of the Political Salaries Review Committee Report and given our suggestions. They have also explained in detail their formula for calculating ministerial salaries and other details.

I will focus on discussing principles that the Government should apply when deciding on political salaries, and how they should be accountable to the people. I will also give suggestions on what kind of salary review mechanism should be put in place and how it can be scrutinised by Parliament, to ensure that the Government continue to be accountable to the people when they decide on political salaries in future.

We all know that Singapore's political system is modelled after the Westminster system of government. The Salary Review Committee Report also mentioned that under the Westminster system of government, Ministers under the administrative system will not only be paid a salary, but also allowances granted to Members of Parliament. Under the Westminster system, the judiciary, legislative and administrative bodies, that is, the government, are independent of each other. The legislative powers of the Parliament is the country's highest authority. In other words, motions and policies drawn up by Ministers under the administrative body, have to be discussed and passed by the legislative body – the Parliament – before a decision is made.

We also understand that Members of Parliament are representatives voted in by voters of various constituencies. Once given the mandate, we have to be accountable to the people. The structure of the legislative body of Singapore is different from that of many countries, we do not have an upper house to act as an additional check and balance. All members of the administrative body come from the legislative body. The Ministers and the Prime Minister becomes a Member of Parliament first, before being made a Minister. Therefore, I believe that our legislative body should act as a check and balance against the Government administration. In his speech during the 12th Session of Parliament debate on the President's Address, the Prime Minister said that "the Government is accountable to the Parliament, we welcome Members of Parliament to raise any sharp questions, and debate them in Parliament".

In addition, I feel that the transparency of the Government is also important. In order to have rational debates and an effective system of public accountability, information must be made public. Hence, disclosing the salaries of political leaders should be considered a reasonable request.

( In English ): Mr Speaker, Sir, I will continue my speech in English. This is especially so given that the taxpayer pays for the salaries of our political leaders. Therefore, how much they are paid and the process of how their pay is determined has to be open, transparent, and accessible to the general public. Members throughout the course of this debate also brought up these principles. Indeed the Committee's report also mentioned on many occasions that transparency and accountability to the public was key in their determination of political compensation. This was also the guiding principle under which the Committee recommended a clean wage.

These principles are in line with practices common to the dozen countries and territories in our survey that my colleagues have already mentioned. Only with transparency and meaningful information available can Singaporeans be, and remain, convinced that changes to the pay of our political leaders are not undertaken solely to advance their material interests, and any changes must first be and always should remain respectful of the costs borne by taxpayers.

Page: 979

Therefore, we have three proposals to ensure that the twin towers of accountability and transparency are enhanced in the political compensation process. First, we call for an independent commission to be appointed each time the Prime Minister seeks to change the terms by which compensation is determined. Second, that the findings of the independent commission be always made subject to debate and also approval by the Legislature. Third, a complete list of political salaries should be published on an annual basis.

Taking each point in turn, we note that the Committee has recommended that an independent committee should be formed every five years to review the salary framework. The Prime Minister would determine the members of the committee.

We would like to see this taken one step further. We think that it is important that an independent – by which I mean non-partisan – commission free from executive direction be appointed each time any changes to the formula for political compensation is sought by the Prime Minister. This is in line with practices in many jurisdictions. I will return to a detailed analysis of the practices in some of these countries later.

It is also not enough that such a committee is formed each time changes are proposed. The committee must be accountable to and take directions from Parliament. To respond to Mr Vikram Nair's point on Workers' Party's contributions to this debate, I would like to reiterate that "all roads lead to Parliament", and this is most true here. The principle of Parliament sovereignty is of utmost importance: the report should be published to Parliament and thus to the public – not first for the Prime Minister's eyes only, and certainly not first to a ruling-party caucus.

The findings of the independent commission must each time be subject to debate, modification and approval by Parliament. As the Committee mentioned a Westminster system, we should take a look at some of the systems that evolved from a Westminster system of Parliament.

In Australia, there is an independent Remuneration Tribunal which has three members appointed by the Governor-General. Its determinations are subject to Parliamentary oversight. In Canada, a commission to review the salaries of Parliamentarians is formed within two months after each general election. The report of the Commission must be published within six months of its formation, and the report must be tabled in Parliament for debate and approval. Finally, in the UK itself, in response to our Prime Minister, while it is true that a widespread abuse of expenses by MPs was uncovered in 2009, like all good leaders, politicians in the UK learnt lessons and sought to improve. The Parliamentary Standards Act 2009 was passed by the Westminster Parliament to reform the way MP expenses were dealt with, and to increase the transparency and accountability of the process in order to ensure that such an issue would not recur in the future. There is also a Senior Salary Review Board, which is an independent body that advises on the pay and benefits due to politicians. Because all of this is regulated by statute, Parliament ultimately retains oversight.

Page: 980

We propose that all reports from the committee should always be open to public scrutiny via the legislative process. Citizens can give their thoughts and feedback on it to their MPs, who are their elected representatives. Such public scrutiny would increase transparency and enhance public trust in the procedural rigour of determining political pay. It would also reinforce the position of the Legislature as the one of the gatekeepers for the nation's finances. I would also like to emphasise that seeking public feedback before the report is published is not the same as subjecting the report to public scrutiny via the legislative process before it is debated, amended if necessary, and finally approved by Parliament.

Finally, I would like to bring us back to the Committee's proposal that we maintain a "clean wage" for political salaries in Singapore, particularly to ensure transparency and accountability to the public. My colleagues have already spoken on how we think that a whole-of-government approach should be taken when determining a set of goals and bonuses for our political leaders. I will instead focus on the criteria to which we think transparency should be upheld.

We note the list of salaries published in the report, and it is a step in the right direction. Our proposal is, however, that a list of political salaries should be published on an annual basis in the Government Gazette and/or on the Parliamentary website. There should also be a disclosure of the amounts of national bonuses paid to office-bearers. The list should also clearly state which categories the national bonuses relate to. This will be in line with the "clean wage" principle.

Coming back to the three Westminster countries I spoke of before, all three publish detailed lists relating to political pay. While it is true that each country has a different system of remuneration, with a series of allowances and expenses, we are still able to find a common thread running through these systems. That is, a thread of transparency.

In Canada, one is able to easily retrieve information sorted by year on the amount of compensation each office-bearer is paid. Car, rent and other forms of salary and allowances are clearly laid out in one website. For Australia, this information is available from the Remuneration Tribunal's website. A series of annual reports from the Tribunal lay out the salaries, allowances and entitlements of each MP and office-holder. The UK has in the last couple of years increased the scrutiny and transparency standards in relation to political pay. A full list of salaries and allowances for all office holders is available on the UK Parliament's website. The UK Parliament also recently set up a new independent body €” the Independent Parliamentary Standards Authority – to ensure that there is rigorous regulation of and oversight over MP's expenses. With a few mouse-clicks, a complete list of all expenses claimed for each individual MP is downloadable from the website. Expenses are published on a bi-monthly basis.

Regardless of how the compensation of political leaders is determined by these countries, the bottom-line is that we have stringent disclosure rules relating to the use of taxpayer funds relating to the compensation of political leaders. It is this level of transparency that we are holding up to be the gold international standard. It should be the standard to which Singapore should hold itself up against.

The benefits to this approach are manifold. First, it would help to ensure that misleading, speculative information is not circulated in the public domain about how much our leaders are paid. Second, this will keep lawmakers accountable to the electorate in respect of their compensation throughout their entire five-year term in office, not just at the ballot box. Third, an annual publication of salaries with disclosable national bonuses will allow Singaporeans to be able to see in the "then-and-now" how their leaders have performed and how the pay of their leaders is tied to the fortunes of the nation.

Page: 981

Throughout the course of this debate, we have heard several Members draw comparisons with other countries, which may not score very highly in terms of transparency and accountability of their political systems. Instead of using these countries as examples of how Singapore is different, is exceptional or is better than them, I think that we should instead be focusing on learning from them. We should use their experience and add to it the rigorous standards from well-governed jurisdictions in our quest to ensure our system is robustly and proportionately answerable to our people.

I would like to end by saying that we have a well-informed, intelligent electorate whom I trust will be able to draw their own sensible conclusions from meaningful data made available to them. Singaporeans are not clamouring to know how much the net worth of politicians is, but instead their chief motivation is to ensure that their wages are both fair and commensurate with the performance of their Government. And Singaporeans have a right to know how their leaders are being compensated €” and rewarded €” out of taxpayer monies. We in this House must have faith in our people that if we follow the proposals above to improve transparency of political pay, we will come out stronger for it as a nation.

Above all, I think we are all in agreement that lawmakers should have a strong sense of responsibility, accountability and service towards all Singaporeans, and should work towards our common goal for our country to have an enhanced sense of inclusivity and sensitivity. What better means to start this than in a First-World Parliament?

6.16 pm

Mr Speaker: Mr Vikram Nair, do you have a clarification?

Mr Vikram Nair: Thank you, Mr Speaker. I have three questions for Mr Yaw. The first question: now, I understand that the Workers' Party has no quarrel with the Committee's starting salary of $46,750. In fact, its own starting salary is $55,000. So, am I right to say that your main quarrel now is that over the next five years, the benchmark for the salaries used by the Committee will rise by 50%, whereas your benchmark will rise by 41%? Is that the main concern? That is the first question. Is that a yes?

Mr Yaw Shin Leong: I have raised several concerns and that is not the main concern.

Mr Vikram Nair: But that is one of your concerns?

Mr Yaw Shin Leong: One of the concerns, yes.

Mr Vikram Nair: The other one was the bonus, which I think we addressed earlier. Okay. My second question is this: I have done the sums. If we look at the salary of $55,000 that you have proposed, a rise of 41% on that will arrive at salary of $77,550 a month. A rise of 50% on the sum of $46,750 will arrive at $70,125. So in fact, even if you accept that the Committee's benchmark will rise by 50%, and the Workers' Party will have its benchmark rise by 41% over the next five years, the point is that over the next five years, the salaries proposed by the Committee will still be less than the Workers' Party's base salary. Do you agree with that?

Page: 982

Mr Yaw Shin Leong: I guess we look at the long-term horizon, not just – [ Interruption ] Really! If you talk about nine years or so, the figures will be different.

Mr Speaker: Mr Nair –

Mr Vikram Nair: No, but the debate is about the second and fifth years. So, do you agree that for the next five years, the Workers' Party is proposing a higher salary, even with the differences in rises –

Mr Yaw Shin Leong: I said 2020, not five years.

Mr Vikram Nair: 2020! Even longer. So, that means in five years, the difference would be even less. Is that right?

Mr Yaw Shin Leong: The difference will increase over time. And that is the main point which I made.

Mr Vikram Nair: But even if we take your case, what you are saying is that even for the next nine years, the Workers' Party's proposed benchmark will yield a higher salary than the one proposed by the Committee. That is what you are saying.

Mr Yaw Shin Leong: No, no. You have missed the point. I am saying that over time, the salary proposed cuts by the Workers' Party will decrease, and are more sustainable.

Mr Vikram Nair: No, will rise by 41%. That is what you said.

Mr Speaker: Mr Nair. Allow him to finish his answer.

Mr Vikram Nair: Okay.

Mr Yaw Shin Leong: If you do a calculation, the White Paper's position would be 51%. Whereas a rough calculation of the Workers' Party proposed cuts will be 41% over nine years.

Mr Vikram Nair: I agree with that. But even if you used those numbers, the end result that you arrive at in nine years will be, say, $77, 500 as a base salary from the Workers' Party's calculation, whereas it would be $70,125 on the Committee's. Even if we accept your rate of rise, which I do not necessarily accept because I do not have the basis for it. But even if we accept that, the Workers' Party's position is that the Ministers' salaries will be higher over the next nine years, based on your own proposal.

Mr Yaw Shin Leong: No, you see, it depends on what scenario. If you are talking about a normal, typical bonus scenario, the differential will be less. But you are talking about a maximum bonus scenario, the differential will be glaring, very, very glaring.

Mr Vikram Nair: I agree there is a difference of opinion on the bonuses, and we will take that, I guess. And that is what we have discussed earlier. The final point that I would like to ask is this: do you agree that this proposal is closer to the Workers' Party ideal than the status quo, what is currently being practised?

Page: 983

Mr Yaw Shin Leong: Closer, of course.

Mr Vikram Nair: Okay, thank you.

Mr Speaker: Mr Yee Jenn Jong.

6.20 pm

Mr Yee Jenn Jong (Non-Constituency Member): Mr Speaker, Sir, my party colleagues have touched on many aspects of the proposal. I wish to highlight the part that I have the most concern with. It is the way Ministers' pay is pegged to the top 1,000 Singapore earners. The Salary Review Committee was given the terms of reference by the Prime Minister to "take into account salaries of comparable jobs in the private sector and also other reference points such as the general wage levels in Singapore".

The assumption this Government began with is that political talent is synonymous with career success; that office holders must have comparable pay with top private sector earners. So the Committee arrived at the median income of the top 1,000 earners, less a 40% discount to "signify the ethos and sacrifice that comes with political service". It implies that our political office holders must come from this pool, or that their ability and job scope is equivalent to the top 0.06% of the working Singapore population. This sentiment has indeed been expressed by the Deputy Prime Minister and by various Members over the past two days.

We have constantly used this mindset since 1994, when Ministers' pay was first revamped to tie it to the top earners' in the private sector. While the Committee's new formula is better than that of the previous one which had been narrowly tied with only the top eight earners in six professions, it is nevertheless still an elitist thinking that only those who are top in their professional careers can make it to hold political office.

Running a company well is different from being able to run a country. Perhaps this Government has treated running this country too much like running a business that we have often been referred to as Singapore Inc. So we also tie political work to that of running a very big company. I believe this is a flawed model.

In constantly drumming this message since 1994, we have created an expectation amongst potential political office holders that political office is a career progression for them, and that reaching a Minister's position is like reaching the pinnacle of one's career. It creates an expectation amongst potential office holders that they need a safe route to parachute into Parliament or they would not risk their career. This has made Singapore politics uniquely Singapore. It is a model of politics that despite years of attempts to justify and fine-tune, many have yet to accept. I for one, do not accept this model.

I feel we have over commercialised the nature of running this country. We need to constantly remind ourselves that we have been elected by the people into this House. It is totally different from being headhunted to be a hired top management of a company. We should never forget it is a noble calling to serve the public.

Page: 984

I would like to ask, what aspires a person to take the difficult route of politics? Four years ago, I read with interest about how President Obama as a young student in an Indonesian school, stated that his ambition was to be the President of the United States of America. It was a noble aspiration for a child; an almost impossible ambition given his family background and that he was half the world away from America. Why would he have such an aspiration?

As a child growing up in post-independent Singapore, I have been influenced by several of our first generation leaders whom I had clearly seen have made great sacrifices and have made great improvements to the country by what they did. Now, I wonder what would aspire our future generations to want to become Ministers and to be the future Prime Minister of Singapore. I certainly hope it will not be for career progression.

I share the Prime Minister's concern that Singapore needs good and high ability people to be able to protect what we have. Now, we have often heard that Singapore does not have enough for two teams. I do not agree with this thinking. I have more confidence in our people. During the debate on the President's Address, I had called for political education in schools. It is to strengthen the knowledge of our youths in the functioning of Parliament and of the Government. I believe it is important to instil this sense of public service and political awareness in our youths to give them a better understanding of issues important to our country. We should aim to create aspiring future politicians who will believe strongly in the importance of leading the nation, and that they wish to play a part in it.

Perhaps it is also how we have constantly looked for political talent from amongst a narrow pool of top career performers that has perpetuated lack of interest in political careers amongst the general population. I believe we have been talent ponding for far too long, searching from a small pond for people that fit as career elites. We should instead talent flood with people from all walks of life.

The Salary Review Committee describes the 40% discount as a sacrifice for political service. I personally do not like the word "sacrifice", a term that has been used by various Members throughout the past two days. Being a politician should be an aspiration and an honour. It is the nature of politics all over the world that there will be public scrutiny; there will be challenges balancing family and work; there will be setbacks such as loss in the electoral votes. The reluctant will deem these as sacrifices. Those who aspire to lead will welcome these as challenges to be overcome. Singaporeans do not expect politicians to lead a spartan life with a religious calling. I believe Singapore politics has been more than fair to our political office holders for the past two decades. Even with the levels proposed by the Workers' Party, the political office holders can lead very dignified lives.

Now, we hear examples of former US and UK and other political leaders earning a lot after retirement. I think life has been fair to our retiring political leaders as well. We see that retiring Ministers are sought after by our Government-linked companies and some by multinationals. I believe the experience they have gained while in office have also increased their market value. Some Members have said that the Workers' Party's proposal supports the level of salaries proposed by the Committee, just because we happen to arrive at roughly the same basic monthly salary for an entry level Minister. The differences are several but important.

Page: 985

Number one, we start with the allowance for a Member of Parliament because, firstly, a Minister is a Member of Parliament. It is a reminder that we are elected by the people, not selected by a powerful committee to become Ministers. Secondly, the base salary for entry-grade senior civil servants at MX9 grade in less subjected to fluctuation compared with incomes at the 500th and 501st top income earners, which is the median of the top 1,000 earners. Over time, by comparing with the top, we could again see the salaries of Ministers rising faster than are acceptable to Singaporeans, as my colleague Mr Yaw has shared earlier. Thirdly, we oppose the huge bonus payout. Again, I would like to say that while we like Singapore to be well run, Singapore is not just a very big company.

As an entrepreneur, Mr Inderjit Singh is acceptable with huge bonuses of 13.5 months. That may be the practice of some very generous private companies. Politically, it is unheard of and it is unacceptable to the electorate. The bonus for any political party will come at the ballot boxes.

Now, I would like to thank the Prime Minister for acknowledging that the Workers' Party's pay formula works out to be less than what the Committee has proposed. I believe Mr Vikram Nair and Mdm Halimah Yacob could check with the Prime Minister on how he arrived at the calculations. In our computation, the benchmark point annual salary for an entry level Minister with 13th-month bonus and an average 2.5 months bonus is $852,500, compared with $1.1 million as recommended by the Committee. This is a 46% cut from the 2010 annual pay. Furthermore, a portion of the bonus is deferred into a bonus bank. Under our proposal, the Prime Minister with the 13th month bonus and 2.5 months bonus will receive $1,534,500, compared with the recommended $2.2 million. This is a 50% cut from the 2010 annual pay.

Before I conclude, I would just like to address a point that Mr Vikram Nair has brought up. He seems to have harped twice on what we have contributed to Mr Gerard Ee's Committee. My colleague, Mr Gerald Giam has already shared that he has met with the Committee and he has given me permission to share that he has spent more than two hours with the Committee. Now, I wonder how many hours did Mr Vikram Nair spend with the Committee. During the discussion, Mr Gerald Giam shared many of the principles that are in the current Workers' Party proposal including deferred bonus, KPIs, our benchmarking practices and so on. Now, we do not feel that we have to give everything to the Committee and this is precisely what the Parliament is here for. The Parliament is the place where we will debate the whole proposal. I am not sure if Mr Vikram Nair expects that we are here to just "rubber stamp" the proposal. We are here to debate the proposal and, according to his speech, he said that if we are to oppose, then we are supporting the previous pay level. I believe Parliament is where we come up with another proposal to be decided upon.

In conclusion, the annual levels that we have proposed are not the same as that of the Review Committee. More fundamentally, we object to the principles used to set the benchmark for the Ministerial salaries. Therefore, I oppose the motion.

6.34 pm

Page: 986

Mr Lim Biow Chuan: Sir, the report from the Ministerial Salary Review Committee led by Mr Gerard Ee emphasised three important principles. First is that salaries must be competitive so that people of the right calibre are not deterred from stepping forward to lead the country. The second, political service ethos entails making sacrifices and hence they should be a discount in the pay formula and, third, there should be a clean wage with no hidden perks. The report also recommended a new benchmark with various cuts to the salaries of the President, Prime Minister, Ministers, Speaker, Deputy Speakers, political appointment holders plus cuts to the MPs' allowances. The salary of an entry level Minister was benchmarked to the median income of the top 1,000 earners who are Singapore citizens.

The first question before this House is whether the three principles for determining Ministerial salaries are a suitable basis for determining the salaries of our political leaders. If the answer is "yes", then we go on to discuss how best to implement these three principles. Sir, I agree and support these three principles. In the debate on civil servants' salary back in April 2007, I took the position that Singapore should pay our Ministers and senior civil servants competitively, otherwise we risk the situation where you have a poor quality and incompetent government and possibly corruption. I also called on the Government to look for a formula to compensate our Ministers and civil servants well and yet allow our citizens to appreciate the sacrifices that our leaders are making. In other words, we need to strike a fair balance such that the Government does not pay million-dollar salaries to the Ministers, which is politically difficult to accept for any citizen.

Like several other speakers before me, I believe that politics is a calling. It is a calling to serve the country without the usual motivation of high financial returns. It is a calling that requires a person to put the country above self. Sir, I agree with the hon. Member for Aljunied GRC, Mr Chen Show Mao, that it is indeed a privilege to be called upon to serve country. In fact, this point was also raised in the report of the Committee. I am certain that all Members in this House are also serving because they feel the call to serve, the call and the need to make positive difference in the lives of fellow Singaporeans and not that there is a high salary or allowance to be paid to them.

I submit that one of the political objectives of any government would be to promote unity and common bonding amongst its citizens. By paying our political leaders too high, the Government may inadvertently have caused unhappiness and division amongst its citizens. So I believe it will be a right step for us to consider revision of the salaries so as not to cause division amongst our citizens. For that reason, in 2007, I had expressed my reservations about the salary tag of $2.2 million for an entry level, MR4 Ministerial grade. However, even though most of the politicians in this House have served out of a sense of calling, there is a need to balance the need of political office bearer, to provide fairly and reasonably for his or her family. Like every other Singaporean, our Ministers, too, owe a responsibility to provide as well as they can for their spouse and their children. Thus, we should be mindful that we should not ask our Ministers to sacrifice more than what the country can afford in terms of Singapore's political objectives.

This then begs the question – what is a fair salary to pay for the political leaders? And like Ms Denise Phua, I think that everyone, everyone of us has an opinion as to what is a fair salary to be paid to our political leaders. From the many discussions with fellow Singaporeans, I conclude that most Singaporeans do not expect our Ministers to be paid too lowly. For the heavy responsibilities that Ministers undertake, they do deserve a fair and competitive amount of compensation. I feel that it is not in the interest of Singapore for our Ministers or office bearers to have to constantly worry about their family income or the welfare of their family. They should have the freedom to concentrate on their jobs of managing their Ministry and planning for the future of Singapore with full assurance that they can provide for their families in the same manner as the majority of their contemporaries.

Page: 987

I think it will be wrong if our salary formula only allowed those persons who have attained a high degree of success in their career to enter politics. It may mean limiting our choices of Ministers to only a very select few businessmen who have either inherited their wealth or have already attained success in their career and hence do not need the money.

It will also be wrong for our Government to set a salary structure so low that it makes it difficult for the Prime Minister to challenge potential leaders to serve the country or to find suitable men or women to take on such a heavy burden of ensuring that Singapore success story continues. And it would also be disastrous if we adopt such as poor salary package such that our political leaders will feel tempted to illegally enrich themselves so that they can keep up with their peers. There are many examples in other countries where this has happened. Thus, in some countries, where ministers who despite being paid poorly can still afford to accumulate assets that are many, many times their salaries.

On the issue of financial sacrifice, I agree that the ethos of public service would require some form of financial sacrifice from the Ministers. Hence, even though the consultants had assessed, based on the closest comparison that CEOs in private sectors holding similar-sized jobs to entry-grade Ministers are paid a median salary of $2.29 million. It would generally not be acceptable for most citizens to expect that their political leaders are paid such an amount.

Thus, Sir, I am always appreciative of the personal sacrifices made by Ministers, who have given up huge pay packages in the private sector to join the Government, simply to answer the call of service for the country. Ministers like Dr Ng Eng Hen, Dr Vivian Balakrishnan, the late Dr Balaji, Mr Gan Kim Yong, Ms Grace Fu and just earlier I heard Mr Heng Swee Keat, have decided that the privilege of serving the country is a higher calling than to continue their pursuit of material success in their individual chosen fields. I believe that if the Workers' Party look at the calibre of this Cabinet, they will acknowledge that this Government does not over-commercialised the running of this country. But instead, the Government goes to great extent to ask suitable candidates to answer the noble calling.

Likewise, Sir, I hold in great admiration our former Prime Ministers, Mr Lee Kuan Yew and ESM Goh Chok Tong, both of whom gave up their private sector career to serve the country many years ago. Even to this date, Mr Goh Chok Tong continues to serve the nation as Emeritus Senior Minister. He travels, he promotes Singapore without collecting any salary as a government Minister. Such is the ethos of the current Cabinet Ministers and I believe that Singaporeans can be proud of the fact that our political leaders do make sacrifices to answer the call of duty, to make a difference to the lives of other Singaporeans.

Page: 988

Sir, the Ministerial Salary Review Committee had engaged the services of a consultant who is a leader of global provider of human resources, Mercer Singapore Pte Ltd. They are experts in remuneration issues. After the report was issued, several other human resource consultants were interviewed and many of them had also described the recommendations as fair and reasonable. Whilst each one of us have our own individual views of the right pay package, I think that it is wisdom in leaving this issue of compensation package of political leaders to the human resource experts in the field. We set the basic principles that we believe in and then we leave it to an independent panel to make the recommendations on the correct level to peg the salaries. Otherwise, we can spend days and weeks debating on what is an appropriate salary for our ministers and other political leaders, all of which will be based on our own individual assessment, our own individual judgement.

Sir, allow me to make a few other points. I am appreciative that there has been a review. For the Government to ignore unhappiness of the voters against the salaries of ministers would be insensitive. The fact that this review took place is a very strong message that the Government does take into account the views of the people. The fact that the Government is also accepting the recommendation of the independent Committee is also a right step. There have been substantial cuts to the salaries of the President, Prime Minister and Cabinet Ministers. At the end of the day, based on the salary of about $55,000 per month for a MR4 Minister, as a judgement call, I feel this is a reasonable sum for the level of responsibilities that a Minister holds. However, I would urge the Government to find ways to formulate policies that will help all Singaporeans improve their lives. I am of the view that if every Singaporean is able to say that their life has improved after five years, they will not begrudge the salaries payable to our political leaders.

Next, Sir, I ask the question: should we peg the salary of an entry grade Minister MR4 to the median salary of the top 1,000 earners who are Singaporeans? Or should we peg the salary to the median income of the lowest 20% group of Singaporeans as has been suggested by some parties? I have never been comfortable with a peg to the top earners – whether it is to the top 1,000 earners or bottom group of earners. If you peg the salary to the top earners, when these top 1,000 earners earn more, then the salary of the political leaders will invariably increase. This will again create some degree of unhappiness. As for the peg to the bottom, the question is how to apply the multiple. The multiple is really arbitrary and regardless how you see it, it is not realistic. I would prefer to have a fixed salary without a peg and then make adjustments for inflation every few years. If there is a mechanism for the salary to be reviewed every five years, then perhaps the Government can consider forming an independent committee comprising human resource experts to review the salaries of political appointment holders every five years. The salary for the Government would then be fixed for that five-year period. Whatever the formula is, I would submit that we should find a formula that will assist Singapore to find capable and committed leadership over the long term.

Sir, I am in agreement with the recommendation to scrap pensions for Ministers. In fact, I would go further to ask that we scrap pensions for the civil service as well. There is no reason why any member of the civil service should have such differential treatment. After this review is passed by Parliament, we may have an absurd situation where our Permanent Secretaries and other key civil servants are earning more than their Ministers, will be having their pensions and to add to that, they take no political risk. Would we in the future be able to persuade capable civil servants to give up their careers to join in the political service? Hence, I join Ms Denise Phua to ask the Government to consider forming an independent committee to assess whether we are pegging the salaries of the Administrative Service to the right level. Their high salaries have caused some degree of unhappiness amongst other civil servants who are not Administrative Service officers. For the sake of the entire civil service, we should review their salary package as well.

Page: 989

Sir, it has been said many times that Singapore is an aberration. For a small country like ours to be so successful is due in large part to our people's hard work and in part to our having good political leadership. Good government cannot be left to chance. It would be risky for any government to wait for 10, 20 capable and passionate people with integrity to step up every five years and say that they would give up their careers, they would take major financial sacrifices to serve the people of Singapore. Sir, having heard the Prime Minister, I understand his concerns and the need to find capable, competent men and women of integrity for the future of Singapore. Hence, Sir, I would urge the House to accept the recommendation of the Committee to pay our political leaders fairly with a significant discount to reflect the point that politics is a calling and not just a career.