CIVIL SERVICE SALARY REVISIONS

CIVIL SERVICE SALARY REVISIONS: Debate resumed.

Mr Lee Hsien Loong: So you can see that we have been stringent in our evaluation. Only two Ministers were in the highest bracket of eight to 10 months' bonus, more than a third were in 0 to 5 months' range, and the rest were in the middle, and similar numbers for the Ministers of State. The Parliamentary Secretaries are on a more stringent scheme.

I should explain that this is not over and above the benchmark. This is part of the benchmark. So when we say MR4, it is not a guaranteed amount. It depends on growth and performance, but we depend on every person giving of his best so that, as a team, we can deliver results for Singapore.

Sir, these are all the arguments which we can make and which I think are strong arguments why we should do this. But despite these arguments, I know that a lot of people still find the Ministers' salaries policy difficult to accept. And I think there are some reasons for this. The

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income gap is widening, the economy is doing well, but some people and businesses are still facing difficulties. As one grassroots leader told Mr Lim Boon Heng: "Ministers' pay goes up, our pay did not go up, our business has not improved, prices of goods and services have also gone up." These are real problems on the ground which people feel and which colour their perceptions. So some people say, "In principle, I support the salary revision, but this is not a good time." I agree. RAdm Teo said, "But we must do it in good time", meaning early. But I would concede that this is not a good time now because we have just raised GST, not everything has been sorted out in the economy.

But on the other hand, firstly, there is no good time. Secondly, and more importantly, there is urgency. I considered waiting one year. This might have made the package easier to explain and might have shown more sensitivity because we have just done hard policies with the GST. But this is a problem which is very urgent. It is urgent because it has been seven years since we last adjusted. Since then, the private sector has surged ahead. You have seen the charts RAdm Teo has shown to you for the benchmarks, particularly for MR4. The Government held back after 9/11. It held back after SARS. In fact, it had not merely held back; it took pay cuts of 10% and, after SARS, another 10%. We took the pay cuts but, in the last two years, the gap has still widened, and the private sector is now rallying ahead.

If we look ahead, the whole of Asia is booming. Many Singaporeans are going after opportunities all over Asia. If Singapore does as well as we expected to do, then the opportunities and rewards in the private sector are going to be tremendous. And not just the dollars, but the excitement, thrill, the adrenalin of

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going into new markets, starting new businesses, creating a new presence in first-tier Chinese cities, second-tier Chinese cities, the Middle East, India, and Central Asia. If we wait till next year or the year after, the Government will lose people, the service will say this is a government which shies away from a politically prickly decision and, meanwhile, we will lose ground further. By the time we move, even a 33% increase will not be enough.

So we cannot afford that. We have to move now. And we have to keep on adjusting as the private sector moves, because this is a dynamic situation and we have to stay abreast of it. That is why the Ministerial Statement says we are making one move on 1st April 2007, a second step on 1st January 2008 and the third step on 1st January 2009. If Asia continues to thrive, some of these adjustments are going to be large. But we have to do them. Not a fresh decision, but as a consistent policy already debated and decided upon. This policy is for the future. Mr Lim Swee Say explained it yesterday as "Old Lim Swee Say" and "New Lim Swee Say". So I told him both Lim Swee Says better make a speech in Parliament, which he did.

But let me put it my way. We are preparing for the future against the backdrop of a new globalised Asia completely transforming itself. And this policy is intended to work not for us, but for a new generation of Singaporeans. The test is not whether my present Ministers will leave because I know some MPs asked, "Who has left yet?" I think Ms Sylvia Lim asked that question too. The test is whether we have good Ministers here to face good MPs in this Chamber in 10 or 20 years' time.

We must and we will tackle the problems which people feel and which make them sour on this issue - income

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gap, middle-aged workers, healthcare costs. These are important priorities for me and my team, and we have started many programmes to deal with them: Workfare to help the lower-income workers; ComCare to help the needy; improvements to Medisave, MediShield, Medifund to make healthcare more affordable; and upgrading of HDB flats to enhance the value of your property and improve your quality of life. This applies even to rental flats; it goes all the way throughout our society. We will do more to help those who are in trouble - the poor, the needy and the unemployed. How can we do so most effectively? By building a good team which will grow the economy, conceive the ideas to tackle these and future problems. And by having good people who are in touch with your needs, doing their best to make your life better, and who care for Singapore.

This is going to be a controversial and emotive issue for a long time. But I am convinced that we are doing the right thing. The cost of building the team to serve Singaporeans is tiny, compared to what they can deliver, what is at stake. What is the cost of having the wrong team in charge of Singapore? It is what the Beijing News article called " zi hui cheng ben ", ie, opportunity cost of making the wrong decision. Where would we be now, if we had not thought of NEWater many years ago? How would our children be coping if we did not have first-class schools in every HDB town and 40% of every cohort failed PSLE, which used to be the case when I was in school? What price do we put to safe streets and law enforcers whom the public can trust? Have we made the right decision? I am convinced so, but time will show and Singaporeans will decide. By the next election, we will present our report card to Singaporeans, then judge us on our performance, whether this Government has delivered on

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its promises, whether you have better jobs, better lives.

Mr Speaker, Sir, on Monday, RAdm Teo quoted a piece from Richard Vietor, a Harvard Business School professor, who wrote a chapter on Singapore Inc. I think some of his passages are worth quoting. I will just read you this:

"Singapore has become a rich country. It has remained secure in Southeast Asia amid countries far larger and somewhat less stable than itself. Singapore has done this through a combination of great leadership, effective developmental strategies, and strong government institutions. It is difficult to think of another country with a similar set of government institutions that work so well ... ."

"Yet, Singapore's future remains uncertain. While it continues to grow quickly, the challenges of becoming a knowledge-based economy are immense. Singapore has done it in the past and thus serves as an admirable model of what is possible. It remains to be seen if the country can continue in the future."

It is the task of all of us to get the best team to lead Singapore, and to prove that Singapore's success can continue well into the future. [ Applause .]

6.40 pm

Mr Speaker: Dr Neo. Only questions and clarifications. No speeches, please.

Dr Lily Neo (Jalan Besar): Mr Speaker, Sir, I would like to follow PM Lee's footstep, and I, too, am not going to take the MPs' Allowance increment and I am going to donate it back to my PA allowance cases in my constituency.

I will try to phrase my question. May I ask PM Lee whether my constituents will blame me for supporting him and could I say to my constituents that it is for their reasons that I support PM Lee's call and bold step to increase the civil servants' increment and our Ministers' increment?

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The reason is that Singapore, the little red dot with no natural resources, cannot take chances. It must maintain its prosperity. If Singapore should falter due to incompetent leadership and wrong policies, it is the poor Singaporeans and the destitutes that would have the most suffering.

Mr Speaker: You are making a speech, Dr Neo.

Dr Lily Neo: I am finishing, Sir.

Mr Speaker: Please do.

Dr Lily Neo: Therefore, we must prevent it at all costs, now and for future years.

Mr Lee Hsien Loong: Mr Speaker, Sir, the Member has put it well. This is a message which has to be presented, not just by me or my Ministers but by all the MPs and, in fact, by all the grassroots leaders in all of the constituencies.

I know there have been grassroots leaders who say, "I support you, but give me arguments which I can use to persuade people why you are doing the right thing." And that is what I have tried to do today.

Mr Speaker: Mdm Ho, are you making a speech too?

Mdm Ho Geok Choo: Mr Speaker, Sir, I respect and am very touched by PM's sincere gesture to hold his salary for five years and to donate the increase to charity. But, Sir, I fear maybe this is a rub-off of the paranoidial culture of the PAP Government. I fear that, out there, there may be others who may be taking PM's magnanimous gesture as a retreat and a face-saving admission that the policy is flawed. And I think it is so important for us to emphasise and

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underscore in this Chamber that what PM has done is really because he cares for Singaporeans and I hope PM will make a clear clarification here.

Mr Lee Hsien Loong: Mr Speaker, Sir, I have stated my position, explained my reasons, and said that I do not expect Ministers or MPs to follow my example. I have my reasons to do it which, I think, Members understand.

Mr Speaker: Pursuant to Standing Order 44(2), the motion to consider the Ministerial Statement on Civil Service Salary Revisions lapses at the conclusion of debate.