Salaries for a Capable and Committed Government

Debate resumed.

6.52 pm

The Minister of State for Health (Dr Amy Khor Lean Suan): Mr Speaker, Sir, the subject of Ministerial salaries has never failed to elicit strong public reactions since it was first brought up via a 1994 White Paper. The response to this latest Ministerial salaries review is no different.

Much of the debate centers on the quantum of salaries themselves. The views articulated are divded. Some say the cuts are not deep enough. The benchmark to the top 1,000 Singapore citizen earners is wrong. The proposed benchmark salary of $1.1 million for a new Minister is still too high to reflect the spirit of public service.

Sir, these criticisms are understandable given that most Singaporeans do not earn anything near the salaries recommended for Ministers, even after the adjustments. Moreover, I believe that many people are genuinely concerned about the kind of individuals we will attract to run the government with such a salary policy. Will the wrong people seek political office for the financial rewards it offers?

However, I submit that there are important principles in this current White Paper on Ministerial salaries that are worthy of consideration and support. I urge the naysayers to carefully consider these with the long-term interest of Singapore uppermost in their minds.

I have four points to make. Firstly, we must bear in mind that this is the first time the review has been made by an independent committee comprising well respected and experienced individuals from the private sector, the Labour Movement and the social sector. The Report is not the work of politicians or civil servants who may be perceived to have vested interests.

This eight-member committee individually and collectively have impeccable management and human resource expertise. In turn, they are ably supported by Mercer, a firm recognised to be an international expert on remuneration issues. They spent seven months painstakingly seeking feedback and deliberating on the issue before coming up with the recommendations. I sincerely believe that the long-term interest of the public and the future of Singapore are uppermost in their minds even as they ponder long and hard over the issue.

In fact, I applaud the Committee in courageously accepting the appointment, knowing full well that the subject matter is extremely delicate. To do justice to their efforts, we should objectively evaluate their recommendations and respond rationally to them, whatever our political inclinations. That this independent, expert committee has, after careful deliberation, chosen to affirm the three principles of competitive salaries, a "clean wage" and the ethos of political service which entails making sacrifices indicate that these are sound principles which we should not easily dismiss. I note that the Workers' Party has also stated its support for the principles.

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Secondly, we must also bear in mind that the contentious salary benchmark, the benchmark for entry level Ministers, has been broadened considerably compared to before, although some people take the view that this resulting salary is still too high. A key contention is why the need to link Ministerial salary to the pay of the top 1,000 Singaporean earners? Why not the top 2,000 earners, or 3,000 earners? We should not forget that there is a 40% "public service discount" to the benchmark. The discount would effectively drop the effective salary to maybe the median of the top 2,000 Singaporean wage earners.

Other options: why not link it to the pay of Ministers in other countries or the median income of Singaporeans? Better still, just pay them a "reasonable" wage that will allow them a comfortable lifestyle but no more? In retort, how really does one set the cut off point for a "reasonable" wage? The same argument applies to any benchmark or multiplier one cares to pick.

The Workers' Party has proposed what it calls a more "people up approach" in setting Ministerial salaries following what they consider are practices elsewhere in the world. This is based on what they judge as a "reasonable" multiple of a Member of Parliament's allowance, and this in turn is pegged to the salaries of divisional directors in the civil service, excluding the Administrative service. But what exactly do they mean by a "people up approach" to setting Ministerial salaries? How does pegging salaries to the pay of civil servants be said to be "people up"?

Firstly, the presumption that the Workers' Party makes is that political service is in the genre of public service. That is only partly true. Political service is more than public service. Civil servants are not subject to the votes of citizens nor do they need to carry the ground in policy making. So, pegging ministerial salaries to civil service salaries is an inadequate mechanism to account for the burdens and responsibilities that come with the job.

Secondly, in order for the civil service to draw capable people into the service as a career, it also adopts the principle of competitive salaries taking into account relevant private sector salaries at all grades. So why is this principle not acceptable to the Workers' Party when it comes to pegging Ministerial salaries? Instead of first pegging MP's allowance to the pay of divisional directors which is already pegged to market norms, and then arriving at the Ministerial salaries using some multiple, which is arbitrary, would it not be much more transparent to peg Ministerial salaries to the competitive salaries that the calibre of people we are looking for in Ministers earn, or have the potential to earn, coupled with a discount for the ethos of public service? Currently as the MP allowance is a percentage of the entry level Minister's salary (17.5% of MR4 benchmark), the latter is already conversely a multiple of the former! I do not see how their proposed formula is an improvement over the Committee's recommendation.

Thirdly, what multiple should be applied to the MP's allowance so calculated to arrive at the Ministerial salary? Arithmetically speaking, if the multiple is high enough, the outcome could be the same as what the committee is recommending which is so in this case where the Workers' Party has come up with a similar base salary of $55,000 per month for a new Minister.

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Conrad Raj in his article in TODAY dated 7 January, asked, "What makes our politicians so unique that they should not be compared with others elsewhere?" But to which country should we compare? As one Forum writer to TODAY noted, we are a country unlike any other. He asked, "Is there a similar-sized country in terms of population, land area, economy, lack of natural resources and is multiracial, multilingual, multicultural and multi-religious?"

When and if Singapore falters, do we have a big brother to fall back on, as in the case of Hong Kong? Are we endowed with oil and mineral reserves which we could draw on to fund budget deficits or cushion any economic crisis, as in the case of many resource rich countries?

Sir, my third point is this: precisely because government is such a serious and strenuous business, it should be in our collective interest to attract the most committed and capable people for the job. The work demands are onerous and getting more so – amidst the vulnerabilities of our small size, there are complex international and domestic issues to deal with, sudden crises that occur, multiple trade-offs among policy choices, difficult decisions to be made. We need honest and capable men and women, strong and yet able to listen and flexible enough to change course where necessary, who can deal with foreign leaders, who can sell Singapore and attract investors, hold steady in a crisis, and who have a good grasp of global issues, who are unbounded in their thinking by convention, and who have sound judgement.

If you are not convinced about the demands of a Minister in Singapore, just take a look at Minister Shanmugam. Unfortunately, Minister Shanmugam is currently not here, or Members can take a closer look at him. Some four years ago, he was a top litigation lawyer. No doubt top litigation lawyers face enormous pressure and work long hours when trials are on. Yet I observe – apologies to the Minister – he certainly has more white hair than before he was appointed a Minister. And, I stand corrected by medical experts – I do not think that is purely due to ageing or just genes! I contend that this is more a sign of the pressures and stresses of political office.

I would hasten to add that this white hair barometer applies to Dr Ng Eng Hen, who had a lucrative medical practice before he entered public office. When he was made a Minister, I noticed that his white hair index went up several notches. Mr Speaker, Sir, women's hairdo and men's hair colour receive equal attention in this House!

On a more serious note, to paraphrase what the Committee says, the aim is to attract the best in their prime to give of their best to Singapore. To ensure Singapore continues to succeed, we will need to be able to attract as many capable people as possible to enter politics, even before the peak of their careers. We cannot leave it to chance nor wait till they have made enough money for themselves and their family before they enter politics as is the case in some other countries.

Of course, there are other criteria for public service, such as character, values, and passion to serve that must be considered and that Deputy Prime Minister Teo has noted are in fact pre-requisites. But by the same token, individuals who desire to be in public office and are willing to take hefty pay cuts do not necessarily make good politicians.

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So to the Workers' Party's allegation, this approach of pegging pay to the top 1,000 income earners, does not assume that political talent is found only among the top 1,000 earners. As journalist Chua Lee Hoong rightly pointed out in her commentary in The Straits Times dated 14 January, this is not equivalent to saying that people who are top earners in the private sector will make good political leaders or that good political leaders will necessarily earn top dollar in the private sector. Rather, benchmarking to the pay of the top 1,000 Singaporean earners is intended to reflect the importance and high demands of political office, and the calibre of people that the government should attract to meet those demands.

One should not dumb down the qualities required or short-change the people of Singapore by appealing only to the sense of sacrifice and moral high ground. We need to be realistic in our expectations. This argument of sacrifice for public office can only carry us so far. I hasten to add that the turbulent era during Mr Lee Kuan Yew's generation formed the crucible for the spirit of public service to manifest as it did in the past. But today, we are not living in revolutionary times and able people have choices.

We do not want to attract unsuitable people who are motivated by high salaries to come into office but we must also not make entry into politics too heavy a price to pay that it deters people from considering political office. As a wise man has said before, "a workman is worthy of his hire."

For those who believe that it is good practice to adopt international benchmarks, besides the fact that most countries do not adopt a "clean wage" system, it must be remembered that we are looking for capable Singaporeans who have myriad opportunities across the globe. For such talented individuals, the opportunity cost to entering politics is not the pay of other politicians across the world, but the pay they could earn as highly mobile global talent. In my view, political talent is even scarcer than business, professional, managerial or sports talent, especially as we cannot go on a global talent search for politicians as one could for the CEO of a listed company. Singapore must be run by Singaporeans who have deep stakes in this country. Surely, it is only fair that we look at the opportunity cost to these people if they were not in politics, rather than what politicians in other countries earn.

The fourth aspect of the Committee's recommendations that deserves credit is the removal of the pension scheme, the replacement of the GDP bonus with a National Bonus that uses four socio-economic outcomes as measures and five yearly reviews by an independent committee. All these are direct responses to the public's concerns about the previous salary formula.

While welcoming the new National Bonus, some economists feel that not all the four indicators reflect accurately citizen's welfare and could be replaced with other indicators. Yet others feel that the four indicators could be prioritised and given different instead of equal weightage. Sir, I submit that, ultimately, there is no single formula that can satisfy everybody and a judgement call has to be made. The Committee had noted that it had considered a wide range of indicators before settling on the four.

Moreover, the Committee's recommendation for a regular five-yearly review of the salary framework by an independent committee would ensure that the framework remains appropriate over time and that the process remains transparent to the public. The time frame of five years, which is about equivalent to a term of government, is reasonable as it provides a sufficient time horizon over the length of a typical economic cycle for the Committee and the public to assess the appropriateness of the formula and propose any changes to be made.

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Sir, amidst all the heat, we should not lose sight of the fact that the pay formula should be forward-looking. It is not so much about the current office-bearers as it is about the kind of government we desire for Singapore to serve Singaporeans into the future. It should set the foundation for a robust compensation scheme that recognises the spirit of personal sacrifice in public service, but at the same time does not deter capable newcomers to political office and form the strongest possible team to maximise Singapore's chance for continued success. This should apply not just to the PAP but to any political party.

Sir, in conclusion, as one Forum writer recently wrote, "let us not make this a race to the bottom (or the median)". This is a race where everybody loses if anybody wins. Sir, I support the recommendations.

Mr Speaker: Dr Khor, my apologies for the failure of the microphone. The fuse seems to have blown in your row. Dr Ng Eng Hen.