PARLIAMENTARY PENSIONS BILL

Order for Second Reading read.

2.42 p.m.

The Minister for Finance (Dr Goh Keng Swee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

There is at present no provision for persons who render public service such as Members of Parliament, Cabinet Ministers, Ministers of State or Parliamentary Secretaries, to be provided for in their latter years even if they have devoted a considerable portion of their working lives to such service. Other Commonwealth countries, such as Britain, Australia, New Zealand and Canada, have pension schemes for their Members of Parliament.

What this Bill seeks to establish is a scheme for payment of a pension to Members of Parliament, Cabinet Ministers, Ministers of State and Parliamentary Secretaries, who have completed 10 years of reckonable service and have attained the age of 50 years. "Reckonable service" is defined by clause 2 of the Bill to mean service, on or after the 1st day of January, 1955, in Parliament as a Member of Parliament or as Prime Minister or as a Minister, Minister of State, or Parliamentary Secretary. The pension is for life and is payable after reaching the age of 50 years and on their ceasing to be Members of Parliament.

The only circumstance in which a Member of Parliament can receive a pension while he is still in Parliament is when he has become what is known as a "backbencher". "Backbencher" is defined by clause 4, sub-clause (1) of the Bill to mean a Member of Parliament who does not hold any office in Parliament and who has previously served as a Prime Minister or Cabinet Minister for a period of not less than three years, and who has completed 10 years' reckonable service and has attained the age of 50 years.

The amount of pension to be paid is to be calculated at the rate of one-thirtieth of a Member's annual salary for every completed year of reckonable service, and, in respect of any remaining uncompleted year of reckonable service, at the rate of one-three hundred and sixtieth of a Member's annual salary for each completed month of reckonable service. The maximum amount payable is two-thirds of his annual salary.

Further provisions of the Bill are explained at length in the Explanatory Statement to the Bill, and I do not think it necessary to elaborate.

In drafting this Bill, the practices adopted by other Commonwealth countries were taken into consideration. In Britain, for instance, a Member of Parliament can qualify for a pension on attaining the age of 65 years, provided he has 10 years' reckonable service, at the rate of �60 or about $450 for each year of service for the first 15 years and thereafter at the rate of �24 or about $180 for each additional year, subject to a maximum of 45 years.

In Australia, a Member of Parliament can qualify for a pension at the age of 40 years. Here, pension is received at the rate of 30 per cent of the Member of Parliament's allowance at the age of 40, rising by four per cent each year until he reaches 44 years. From the age of 45 years on, the Member of Parliament gets a pension at the rate of 50 per cent of his allowance.

New Zealand Members of Parliament are entitled to pensions after nine years of service and on attaining the age of 50 years. The rate is one-thirty-second of the Member of Parliament's last drawn salary, subject to a maximum of two-thirds of his last drawn salary.

In Canada, a pension is paid to a Member of Parliament who serves more than two terms with a maximum rate of Canadian $9,000 or S$27,000 a year.

It is my opinion that our Ministers are grossly underpaid. I, as Finance Minister, for example, earn less than a branch manager of a bank and less than a quarter of what a managing director of a reputable company would earn. Our Prime Minister is earning something like 10 per cent of what he could earn in private practice as a lawyer. Other of my colleagues also undergo financial sacrifice to some degree or other.

We are the old guard and we will soldier on. But what worries us is the question of the second echelon leadership who must in time take over the torch from us. We cannot expect to get future leaders of calibre on the cheap, whatever was the case in the past, and it is as well that the people of Singapore realize and accept this fact. Unless Singaporeans want to settle in the future for a mediocre crack-pot or corrupt leadership, they must not believe they can continue to expect men of ability in future to suffer severe financial sacrifices in pursuit of a hazardous political career. In my opinion, a mediocre crack-pot or corrupt political leadership will ruin this country in an incredibly short time, and such ruination could be final, complete and permanent, as Singapore has no natural resources or a large economic base on which to effect a recovery.

Though the passing of this Bill into law will not guarantee the attraction of leaders of calibre, it is at least a first step in this direction. And to ensure the continued prosperity and success of Singapore, the cost of the pension is a small price to pay.

Mr Speaker, Sir, I beg to move. Question proposed.

3.05 p.m.

Mr Ho See Beng (Bras Basah): Mr Speaker, Sir, at the outset, I must congratulate the Government on introducing this timely Parliamentary Pensions Bill for the Members of Parliament who will have to retire in the course of time. The Government is concerned about their future, as the Minister for Finance has said that the Prime Minister and other Ministers have been underpaid. But if you look at the provisions in the Bill, it provides a pension of only one-thirtieth of the annual salary of the retired Member of Parliament. I would have thought that something like 50 per cent would be justified, but not one-thirtieth of the annual salary, which is a paltry sum.

Sir, I think you will agree with me that in our neighbouring countries, a Member of Parliament has a lot of opportunities to make money. But in the case of the M.P.s in Singapore, especially the P.A.P. M.P.s, there is nothing for them and they cannot do anything at all. That is the reason why I say that the Government should give more consideration to increase the quantum of pension.

The other point is: why must the Government choose the magic figure of ten years' service in order for an M.P. to be able to qualify for a pension? Why not bring it down to eight or nine years? Although one parliamentary term is five years, I feel we should be more realistic. If we accept this Bill without amendment, it means that an M.P. has to be three times lucky before he can qualify for a pension.

3.09 p.m.

Mr P. Govindaswamy (Anson): Mr Speaker, Sir, I join the Member for Bras Basah in congratulating the Government and the Minister for Finance on introducing this Bill in order to help Members of Parliament. But my main concern is with the ten years' reckonable service. I would like to inform the House that as at present, even the Minister for Finance does not qualify for a pension. Only the Prime Minister does. The Minister for Finance will qualify only next July. Therefore, I would like to suggest to him to amend "ten years" to "nine years" because most of the Members of Parliament are young and there is no doubt that they can continue in Parliamentary service. I think nine years' reckonable service is more appropriate. As the Minister for Finance has said, even in New Zealand a Member of Parliament qualifies for a pension after nine years' service.

3.10 p.m.

Mr Yeoh Ghim Seng (Joo Chiat): Mr Speaker, Sir, I do not belong to the second echelon leadership and it is doubtful if I would qualify for pension as a Member of Parliament because I am already rather an old man in this House.

An hon. Member: The Member has no grey hairs!

Mr Yeoh Ghim Seng: Thus, without any prospect of monetary gain, I can say that this Bill is a sensible one. However, I am inclined to agree with the Member for Bras Basah that the proposed pension for Members of Parliament would appear to be rather inadequate, because by the time a Member of Parliament reaches the age of 50 -and I can see from a look at Members in this House that some of them will not take a long time to reach the age of 50 - I am doubtful how much his pension will be worth. If a Member of Parliament can serve ten years, he will get only about $200. I agree with the Member for Anson that if the figure of ten years' service is put down, it is very doubtful if a third of the Members of this House will qualify for such a pension.

3.12 p.m.

Dr Goh Keng Swee: Sir, the Member for Bras Basah either misunderstood the Bill or I have misunderstood him. He says it is one-thirtieth of his pension. Actually it is one-thirtieth per year, so that if you serve ten years, then you get one-third of $500, which is about $180.

An hon. Member: It is less than $180!

Dr Goh Keng Swee: It is $180 to the nearest $10. If you go on for 20 years, then you get about $360. I think the rate of one-thirtieth, which is about 3 1/3 per cent, is fairly generous by way of pension rights. The civil service gets only half that rate. But then, of course, they have security and a longer tenure of employment, whereas a Member of Parliament does not know what will happen beyond five years at the most. Therefore, we thought it reasonable to give a higher quantum. There are Commonwealth countries like New Zealand which pay four per cent a year. So if the Members for Bras Basah, Anson and Joo Chiat think that the total quantum is inadequate, I think the remedy lies not in increasing the pension rate but perhaps in increasing the annual allowance of M.P.s. And it is up to them to settle this question with their constituencies.

As regards nine years' or ten years' service, I do not think my colleagues would mind my revealing to this House that this has been a subject of discussion and debate in Cabinet lasting for weeks. In the end, we settled for ten years. The advantage of ten years will be seen in the last year before the next general election. I am quite certain that we came to the right decision to opt for ten years and not for nine years.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill.- [Dr Goh Keng Swee].

Bill considered in Committee; reported without amendment; read a Third time and passed.