CONSOLIDATION OF NWC ALLOWANCES INTO SALARY SCALES (Effects of)

Mr Tan Cheng San asked the Minister for Finance whether he is aware that the monthly take-home pay of some employees of statutory boards has been affected as a result of the consolidation of the 1973-77 National Wages Council allowances into salary scales and if he will consider taking steps to ensure that the take-home pay of those employees is not so affected.

Mr Goh Chok Tong (for the Minister for Finance): Mr Speaker, Sir, I would like to assure the hon. Member for Paya Lebar that no officer in the Civil Service or the statutory boards loses out in terms of gross salary as a result of the consolidation of the 1973-77 National Wages Council allowances into salary scales. The new consolidated scales and conversion tables were so formulated that, generally, an officer would not convert to a consolidated salary point which is less than the sum of his basic salary and 1973-77 NWC allowances. In the few exceptional cases where the consolidated salary is lower than the sum of the basic salary and allowances of the officer concerned, he is allowed to retain the difference as an allowance personal to himself.

I believe that, in referring to the statutory board employees, the hon. Member has in mind the cessation of the Temporary Adjustment Allowance. This Allowance was introduced in April 1972 for employees of certain statutory boards when Government decided to increase the CPF superannuation benefits of pensionable civil servants by a 2% contribution to the CPF. Non-pensionable civil servants had their rate of contribution increased from 10% to 12%. The Allowance of 2% was given to employees of these statutory boards because the rate of superannuation contributions of these employees was already 15% of their basic salaries. Under the CPF Scheme, the superannuation contributions are computed on gross salaries.

Because the statutory boards concerned have now switched over to CPF and the superannuation benefits of their employees are at 15 1/2% of gross salaries, as is the case for other Government and statutory board employees on CPF, the justification for paying the Allowance no longer exists. Even in the two statutory boards which have retained their own superannuation schemes, the employer's contribution to the superannuation fund is now not less than under the CPF scheme. Finally, the continued payment of the Allowance will place these statutory board employees in a privileged position in that they will be compensated for a rate of CPF contributions which now applies to all Government and statutory board employees on CPF.

The cessation of the Allowance is really a separate matter from the salary consolidation. The timing of the cessation of the Allowance has, unfortunately, given rise to the erroneous impression that it is as a result of the salary consolidation.

Dr Lau Teik Soon (Serangoon Gardens): Mr Speaker, Sir, will the Senior Minister of State consider making necessary adjustments if there are cases where public employees received salaries below what they should receive as a result of the consolidation exercise?

Mr Goh Chok Tong: Mr Speaker, Sir, I have given the assurance at the beginning of my answer to the question that no such cases should exist. If, however, there are specific cases, I would appreciate the Member bringing it to my attention and they will get the necessary attention and adjustment if warranted.