REVISION OF SALARIES OF ADMINISTRATIVE AND PROFESSIONAL SERVICES IN THE SINGAPORE CIVIL SERVICE

3.31 p.m.

Dr Tony Tan Keng Yam: Mr Speaker, Sir, I am making a statement on behalf of the Government on the Administrative and Professional Services in the Singapore Civil Service.

Introduction

The task of government is to govern firmly, wisely and fairly in the interest of Singapore and with the consent of the majority of our population. Good government requires not only honest, able and dedicated political leaders, but also a leadership in the Civil Service who can match the political leadership in ability, integrity and commitment. Only then will political decisions be translated into workable plans which can be implemented efficiently and with the minimum of rancour and disaffection.

To maintain its vibrancy and effectiveness the Civil Service must attract each year and retain in service a sufficient number of the brightest and most-balanced of our graduates. In due course they will occupy the higher echelons in the Administrative and Professional services. To do otherwise is to put our future in jeopardy because, when the present stalwarts in the service retire, there will not be the young men and women of excellence to whom they can hand over their responsibilities. This we must never allow to happen. The terms and conditions of service of the Administrative Service and the Professional services must therefore be kept competitive with those offered in the private sector.

The Professional Services Review Committee (PSRC), working in close consultation with the Chairman, Public Service Commission, recently completed a review of the salaries and other conditions of service in the Administrative and Professional services. Their views and recommendations were submitted to Cabinet on 4th February, 1982, and have been accepted by Government. I shall now outline the major changes.

Salary Revision

In 1979 Government made a comprehensive study of the incomes of graduates in the public and private sectors. This study indicated that while the outstanding Administrative Officer was paid much less than the top 5% of the salaried graduates in the private sector, the average officer in the Administrative Service earned as much as the average officer in the private sector. Government therefore decided in 1979 that a salary revision was not necessary and that it was sufficient to create additional promotional grades to reward the outstanding Administrative Officers and professionals.

The situation today is different. An updated study on incomes of graduates reveals a gross disparity in pay between the graduates in the public and private sectors. The study indicates that the mean annual income of graduates in the private sector is about 42% higher than the corresponding mean annual income of graduates in the public sector. In other words, graduates in the private sector earn on the average 42% more than those in the public sector with comparable years of working experience, field of study, and occupation. The disparity in income between graduates in the private and public sectors is particularly glaring for those in the Time-scale grades in Government service.

The counterpart to this disparity in income between graduates in the private and public sectors is reflected in high rates of resignations of officers in the Administrative and Professional services in recent years. In the case of officers in the Time-scale grades, 67 Administrative Officers, 165 engineers, 24 lawyers, 70 dentists and 281 doctors left Government service in the last four years. In 1981 alone, 22 Timescale Administrative Officers resigned, an attrition rate of 14%. The attrition rates for the Engineering, Dental and Medical services were even higher, while the attrition rate for the Legal service was 12%. At the more senior level, five Superscale Administrative Officers resigned last year, more than the total number who had resigned for the past ten years. The Professional services also suffered from a heavy and relentless loss of experienced, highly qualified officers which, if allowed to continue, would lead to a deterioration in the quality of staff in those services.

Government has therefore decided to revise the salaries of Timescale grades in the Administrative Service and Professional services. The additional promotional grades created in 1979, particularly the three Staff grades, have brought salaries of Superscale Officers nearer to remuneration in the private sector and no revision of Superscale salaries is necessary. However, consequent on the salary revision for Timescale grades, slight adjustments have to be made to the Superscale salaries. Can I now ask the Clerk of Parliament to distribute to Members one Annex (Cols. 481 - 492) which describes the composition and terms of reference of the PSRC, together with three Schedules and one graph. [Copies of Annex distributed to hon. Members.] Annex - THE PROFESSIONAL SERVICES REVIEW COMMITTEE, SALARY PROGRESSION OF ADMINISTRATIVE OFFICERS ON NEW SCALE, NEW SALARY SCALES FOR ADMINISTRATIVE SERVICE, NEW SALARY SCALES FOR ADMINISTRATIVE AND PROFESSIONAL SERVICES, NEW SALARY SCALES FOR ADMINISTRATIVE SERVICE (FOREIGN) AND FOREIGN SERVICE (Cols. 481 - 492)

Timescale Salaries For The Administrative Service

The new Timescale salaries for the Administrative Service are set out in Schedule 1, which is now before Members. These new Timescale salaries were derived from a comparative study of the median incomes of engineering and technology graduates in the private sector. Incomes of engineering and technology graduates in the private sector were selected because:

(i) For a fair comparison incomes of the self-employed graduates in the private sector had to be excluded, and almost all engineering and technology graduates in this sector were employees;

(ii) The engineering and technology graduates in the private sector formed a sizeable group and would be a comparable category of graduates since the majority of recruits into the Administrative Service in recent years were engineering graduates.

The new Timescale salaries have been pitched at a level so that when compared with engineering and technology gradu- ates in the private sector with the same number of years of working experience:-

(i) the income of a good Administrative Officer (who is expected to attain Superscale D in about 15 years) will approximate the 90th percentile income of such graduates;

(ii) the income of an outstanding Administrative Officer (who is expected to attain Superscale C in about 15 years) will exceed the 90th percentile income of such graduates. Graph I shows the new Time-scale salaries in comparison with remuneration in the private sector.

Timescale Salaries for the Professional Services

Government has also approved new Timescale salaries for the Professional services. These are set out in Schedule 11. While the new scales for Timescale Administrative Officers were determined by external relativity, i.e. in comparison with the incomes of engineering and technology graduates in the private sector, the revised Timescales for the Professional services were fixed by internal relativities within the Civil Service and designed to underline the premier status of the Administrative Service.

Implementation of the revised Time-scale salaries will cost $1.85 million per year for the Administrative Service and $8.90 million per year for the Professional services (excluding the Foreign and Education Services).

Reduction of Superscale Grades

To avoid a multiplicity of Superscale grades in the Civil Service, Government has decided to delete the intermediate Superscale grades of H, F, D1, C1 and B1 from the Administrative Service and C1 and B1 from the Professional services. The intermediate grades of Superscale H, F and D1 will be retained for the Professional services to facilitate promotion since there are fewer Superscale grades in the Professional services, the apex grades in these services being Superscale C or lower. Consequent on the deletion of the intermediate Superscale grades, a special promotion exercise will be held for all Superscale Officers in the Administrative Service as well as Professional services to determine their suitability for promotion to the next higher grade.

Foreign Service

In order to maintain good relations with other countries it is vital that our Foreign Affairs machinery should be manned by outstanding and dedicated officers capable of interpreting the complex interplay of national ambitions and puffing forward Singapore's views when necessary. Such officers must be drawn from graduates of excellence and, to attract and retain these graduates, a Foreign Service Branch of the Administrative Service will be created which will be identical in salary structure and recruitment standards with the Administrative Service. Depending on their aptitudes, performance and qualifications, serving officers or fresh graduates will be selected for the Administrative Service (Foreign Service Branch) or for the Foreign Service which will be on par with the other Professional services. Schedule III sets out the new salary scales recommended for the Administrative Service (Foreign Service Branch) and the Foreign Service. Implementation of these scales will cost $0.70 million per year.

Date of Implementation

The revised salary scales and reduction of Superscale grades for the Administrative and all Professional services will be implemented with effect from 1st April, 1982.

Uniformed Services

The uniformed services do not form part of the terms of reference of the present review but no group of officers is more important to Singapore than the senior officers in the Singapore Armed Forces and the Police Force. Without a tenacious, well-trained and highly motivated SAF, led by able, wholly committed officers, Singapore will be defenceless in time of war and become easy pickings for an aggressor. Similarly, without an efficient and non-corrupt Police Force, led by intelligent, determined officers, law and order will not match the wit and guile of shrewd and ruthless criminal types and the texture of our society will be damaged. The salaries and promotion prospects of the senior echelons of the uniformed services will therefore be reviewed by the Ministry of Defence and Ministry of Home Affairs, in consultation with the Ministry of Finance, to reflect the importance of their contribution to the security and prosperity of Singapore.

Education Services

On account of its special features the Education Service will be considered in a separate exercise and the Education Ministry is looking into this matter.

Other Services

This Statement is concerned principally with salaries in the Administrative and Professional services, and this is as it should be since the Administrative and Professional services constitute, in a way, the brain of the Civil Service. However, no matter how brilliant the brain, no organization, least of all the Civil Service, can hope to function effectively unless it has a healthy heart and strong arms and legs. The heart of the Civil Service is team work not only team work between officers in the Administrative and Professional services, whether they are scholars or non-scholars, but also team work between the officers in the senior echelons and the support staff in the Executive service, Clerical service, Nursing service, etc, who collectively make up the arms and legs of the Civil Service. It is only when there is a sense of dedication and common purpose between the Permanent Secretary and the clerical officer that the Civil Service will be able to respond sensitively and quickly to the needs of the public which it serves. While we revise the salaries of officers in the Administrative and Professional services, we should therefore not overlook the need to revise the salaries in the supporting services. This is now being done by the Ministry of Finance in consultation with the Chairman, Public Service Commission.

In view of the large number of other services that have to be reviewed, the Ministry and PSC will have to stagger them. Services which have high turnover of staff and great difficulty in recruiting staff will be given priority over others. However, other reviews which have begun in response to proposals submitted by departments or the trade unions will continue.

In this review the Ministry will not be bound by existing relativities between services and between grades in the same service. Each service will be examined on its own merits and employees on the same salary scale in different services may not get on to the same (new) salary scale after review.

Other Conditions of Service

Finally, the PSRC and Chairman PSC are of the view that other terms of service such as leave, medical benefits and car loans are generally satisfactory except for the matter of housing and superannuation. These will be looked into in a separate exercise. 3.50 p.m.

Mr Ho See Beng (Khe Bong): Mr Speaker, Sir, I just want to seek clarification from the Minister for Trade and Industry. It is not my intention to object to Government's move to raise the level of salaries of the Administrative and Professional officers in the Government service. But I would like to ask the Minister whether there is going to be a survey done for the lower ranking officers in Divisions 11,111 and IV and the daily-rated and monthly-rated workers.

Mr Sia Khoon Seong: Mr Speaker, Sir, before I seek some clarification from the Minister on his statement, could I just very quickly take this opportunity to compliment the Minister and the Professional Services Review Committee for having taken cognizance of the urgency of the problem facing the Government in respect of the terms and conditions of employment in the public sector by putting forward an excellent proposal which the Government has accepted. I hope it is a step in the right direction and not a case of too little being done too late. I also want to compliment the Committee for having taken cognizance of the fact that it is not only the brains, i.e. not only the Administrative and Professional services, that need its attention but also the rest of the civil service. Right now, because of the complex nature and the size of the public service, the review has got to be done step by step. My question is: how long will the negotiations and the study on the revision of the other services be completed? From my experience with the civil service, it normally takes a long time and sometimes they conveniently forget about certain matters. So I would like to press for an answer, at least to be given an indication of the time-frame.

The other question that I want to ask is this. In view of the complex nature and the time involved in this exercise to revise the salary scales of the other sectors in the civil service, as an interim measure will the Minister recommend to the Committee and to the Government that a 14th month payment be paid? [Laughter]. I make this suggestion in seriousness. Apart from the salary scales, one very important factor that contributes towards the satisfaction of the worker is this question of bonus. I think this is a factor that must also be taken into account.

In the past, for example, a lid was placed on the quantum of bonus to be paid in the private sector, and the lid was that no more than three months' bonus could be paid. But in the present move by the Government to encourage, stimulate and promote greater productivity, the lid has been lifted. In the private sector, including Government-owned companies like Sembawang Shipyard and Keppel Shipyard, they have paid bonus something like five months' salary or more. I think this has made the disparity even more invidious and more envious of the private sector especially when the Government stili sticks to the 13th month payment and also when civil servants retire they are not entitled to the 13th month payment. Thanks to the Minister for Finance!

The 14th month payment as an interim measure to the civil servants will, I think, show them that, apart from giving the Professionals and the Administrative Officers a fairly generous revision - taking into account that the Government is usually very miserly - the Government has also not neglected, right from the start, those who do not belong to this class. I think this move has got particular significance because bonus is an important factor of productivity and so forth. We are often asked to excel and to follow the Japanese -

The Minister for Law (Mr E.W. Barker) rose Mr Speaker: Mr Sia, will you give way?

Mr Sia Khoon Seong resumed his seat.

Mr Barker: Sir, I just like to point out to the Member for Moulmein that, after the Ministerial Statement, he is confined to asking questions. He has taken a long time to ask two questions.

Mr Sia Khoon Seong: Mr Speaker, Sir, my questions require a lot of consideration! My questions are not only directed at the Minister for Trade and Industry but also the Finance Ministry, and therefore a little bit more time is necessary for me to state the rationale for my questions. I am about to complete whatever I want to say.

We have been asked to follow the Japanese example, their work attitude and so forth, and even the Koreans who are noted for their hard work. But I just want to point out that one of the features of management of workers in Korea and Japan is a very sizable amount of bonus. In Japan, it averages between six months and 10 months' pay. In Korea, it is six months. In Singapore, Sembawang Shipyard, Keppel Shipyard and the luckier private companies, it is five months. But for the public sector it is one month.

Mr Ng Kah Ting (Punggol): Mr Speaker, Sir, I will ask a question of the Minister for Trade and Industry. May I strongly suggest to the Minister for Trade and Industry that he take seriously the suggestion of my good Friend, the hon. Member for Moulmein, and that is, the payment of 14th month bonus or the 14th month annual wage supplement as an interim measure in recognition of the fact that the arms and legs and the heart of the other part of the civil service do play an equally important role in the overall structure of the entire civil service. Also, should not due recogni- tion be given to an upward revision of salaries to all the various services in Divisions II, III and IV down to the daily-rated and the monthly-rated workers?

Encik Mansor Haji Sukaimi (Kampong Kembangan): Mr Speaker, Sir, I would like to share the compliments given by my good Friend, the hon. Member for Moulmein -

The First Deputy Prime Minister and Minister of Education (Dr Goh Keng Swee): Sir, on a point of order. May I insist that Standing Orders be adhered to and that Members just ask questions and put them briefly?

Mr Speaker: Yes, quite right.

Encik Mansor Haji Sukaimi: - in complimenting the Minister for Trade and Industry for proposing a good scheme for the Administrative and Professional services.

Mr Speaker: What is your question, Mr Mansor?

Encik Mansor Haji Sukaimi: Sir, is it true that the Public Service Commission only selects graduate scholars for appointment to the Administrative Service at the exclusion of the good graduates who may have Upper II and above but who are non-scholars? If yes, what is the rationale? Does this mean that non-scholar graduates of local universities or even of universities overseas are less able for appointment in the Administrative Service even if they have at least a good Upper II? Should we not open appointments to Administrative Service to these non-scholar graduates who have good degrees?

What really are the reasons for resignaions? At what stage do most of these officers, especially Administrative Service Officers, resign the service? What really is he intolerable or tolerable rate of resignaion? Or to put it differently, what is the minimum core number of top-grade AOs necessary to keep the Government machinery going effectively?

Comment on this question: I understand that over the years we have between 15% and 20% of unfilled posts in the Administrative Service. Yet we seem to manage. How certain are we that these salary revisions will effectively check the brain-drain to the private sector? I reckon that the private sector can easily match the Government in improving the terms of service so as to continue to make them more attractive in the private sector. I reckon this can happen.

Finally, besides these salary revisions, are there any schemes to give more specific perks to the Administrative and Professional Officers, and also to the officers who constitute the heart, the hands and legs of the Civil Service? If there are, could the Minister give them in greater detail?

Dr Augustine H.H. Tan (Whampoa): Mr Speaker, Sir, has the Hon. Minister looked into other causes for the high attrition rate of resignations from the Civil Service, such as low morale due to the undue emphasis on high flyers and returned scholars, motivation, industrial relations and personnel management? Should it not be a matter of concern to him and to this House that Singaporeans are so concerned with monetary rewards? Should we not divert the attention of people, especially the civil servants, to matters like dedication and other non-pecuniary returns?

Would the Minister agree with me that the real cause of the brain drain from the Civil Service is the high economic growth rate that we have been experiencing, especially over the last couple of years? Would he also not agree with me that this is also linked up with the boom in the property market which has priced many people out of the market and that, therefore, the civil servants have turned to the private sector in search of high salaries in the hope of getting good homes?

Mr Jeyaretnam: Mr Speaker, Sir, I have two questions. Does the Minister and the Professional Services Review Committee recognize, as has been said by the last speaker, that it is not just monetary rewards that lure people out of Government service or out of Government employment. There are other areas for discontent, such as conditions of service, especially among professionals employed by the Government.

My question is this. Would the Government or the Professional Services Review Committee have a hearing to hear complaints from the Professional services in the Government service in the areas in which they feel discontented about their service with the Government? Secondly, would the Government also undertake a revision of salaries or a review of salaries for all those in the Civil Service, that is, Division II and Division III, and not just confine it to the Administrative and Professional services?

Dr Tony Tan Keng Yam: Mr Speaker, Sir, I would like to thank Members for their suggestions in regard to the revision of salaries which I have just announced. Let me take the questions put by the Members in the order in which they were asked.

First, with regard to the question by the Member for Khe Bong, I can assure him that, as I have stated in the Ministerial Statement, the Ministry of Finance is looking into the salary scales of the other services, that is, Divisions II, III and IV. In their review of these services, they will take into account all the factors, including disparities of pay between the salary scales in that service and the services outside. That will be done.

The Member for Moulmein has asked whether I can give a time-frame for the review of the other services. I regret that this is not possible. There are a large number of these services. If the Ministry of Finance and the Public Service Commission are to do a proper job, they must take their time to make sure that any revisions are justified and fair to the people in the services concerned. But I am sure they will try to expedite it. He has also made the suggestion that during the period of the review the Government should consider making a 14th month payment to tide the other services over, so to speak, during the period of the review. This has also been supported by the Member for Punggol. I shall commend this suggestion to the Minister for Finance. I understand that in Japan bonuses are now paid twice a year, one in Spring and another in Autumn. As we are advocating the Japanese style of management here, I am sure that this suggestion will merit consideration by the Ministry of Finance.

The Member for Kampong Kembangan has asked a number of questions. First of all, he has asked why the PSC only selects graduate scholars to the Administrative Service. The answer is that, of course, this is not true. Entry into the Administrative Service is open to all good graduates who have at least a Second Class Upper (Honours) degree. However, the difficulty in Singapore in recent years is that it is extremely difficult to find a good graduate who is not a scholar. I remember that when I was the Vice-Chancellor of the University of Singapore, we had a peculiar problem there in that there were a number of scholarships for which we could not find anybody to give to because all those who were qualified to receive them had already been awarded scholarships of one type or another. But if there are any good graduates who happened not to have received a scholarship, then the PSC will certainly be pleased to interview them.

As to resignations, there are many reasons why people resign from the Civil Service or from any organization. Salary is only one of them. Occasionally they have differences with their superiors. Some people find that after a few years they are not suited for work in the Civil Service. But undoubtedly salary is one of their major concerns. At what stage of their career do most of the Administrative Officers leave the service? We have found out, over a period of time, that they normally leave after they have served between five and eight years in the Administrative Service. This seems to be the most popular period. I believe the answer is quite simple. If they are male graduates and after they have finished their National Service, they would join the Civil Service at the age of either 23, 24 or 25 years. For the first five years they are quite content to remain in the Civil Service because they are receiving training. Besides, during that time their commitments are also not so many. After five years they get married. Some of them will have their first or second child and then the pressure of their commitments will force them to take a closer look at their careers. Moreover, at about this time they would have had enough experience in the Civil Service to know whether they want to make a permanent career in the Civil Service or whether they should seek their fortunes in the private sector. The period between five and eight years is most crucial. That is why the salary revisions are targetted for the middle range of the Time-scales.

Now, what is the number of core Administrative Officers that we need? The Budget Division has authorized a permanent establishment of 299 Administrative Officers. I am sure we all know very well the nature of the Ministry of Finance. We can be assured that they are not over-generous in allocating posts for the Administrative Service. I can say that 299 Administrative Officers will be the number which we need to run the service at a comfortable level. As at 1st January this year, we had 199 Administrative Officers, 131 Timescale Officers and 68 Superscale Officers. So there were 100 vacancies, or approximately one-third of the number of posts in the Administrative Service.

I think I have answered the question as to how effectively the revision of salaries will check the resignations. But let me say that we will never be able to devise a salary scale such that no one will ever resign. If we do that, then we are doing something wrong. It means that we are overpaying our officers. There must be a certain amount of turnover in any service, in any organization. What this revision seeks to achieve is to check the gross disparity in pay between a graduate who works in the private sector and one who works in the public sector so that we can be sure, we hope, that the rate of resignations will slow down and we can also be sure that we can retain a number of Administrative Officers who will, as the years go by, gain experience and will, therefore, be able to take over the top jobs in future when these are available.

I believe the last question is whether there are schemes to give other perks to the Administrative and Professional officers. During the course of its deliberations, the Professional Services Review Committee and the Chairman, Public Service Commission, also looked into the other terms and conditions of service and they discussed these with the Administrative Officers themselves. The feedback they had was that most of the other conditions of service were satisfactory except for housing and superannuation. As I have mentioned in my Statement today, these are being looked into in a separate exercise. I hope I have covered all the questions.

The Member for Whampoa has asked about the causes for the high rate of resignations. I think I have answered that question. He has asked whether there is not an undue emphasis on scholars and also the need for personnel management in the Civil Service. I do not think that within the Civil Service itself there is any undue focus on scholars.

Promotion within the Civil Service is by performance whether you are or are not a scholar. Perhaps the press has been giving too much attention to a certain category of the Civil Service. But I can assure you that the Permanent Secretaries in the Civil Service are a very hard-headed lot. A scholar may perhaps enter with a certain amount of glory but if he does not perform, he will find that his shortcomings will soon be discovered.

He has also asked whether I would agree with him that the real cause of the brain drain from the Civil Service is our high economic growth and connected with that, the high prices of property. I think that it is undoubtedly true. It is because our economy has grown so substantially and in such a diversified way in the last 10 to 15 years that a wealth of employment opportunities has now opened up for our graduates. Whereas 30-40 years ago there were few openings for good people other than perhaps the medical or the legal professions and one or two vacancies that opened each year in the colonial civil service a good graduate can now take his pick of jobs in Manufacturing, Transport or what-have-you. So the Civil service today has to compete with these other economic sectors for the people which it needs.

Regarding the high prices of properties, I think that this must be of concern not only to the civil servants but also to all Singaporeans. One of the matters which the PSRC would be paying particular attention to would be to see how to improve the housing scheme for Singaporeans.

Finally the suggestion from the Member for Anson as to whether the PSRC would hold a hearing to hear complaints from the Administrative and Professional officers. The answer is that we have already held hearings and discussed extensively with a number of Administrative and Professional officers in the formulation of these revisions. I see no advantage in reopening this again.

He has also asked whether Government would review the terms and conditions of service in the other services. I believe I have answered that, both in the Statement and again in my answers previously.

Mr Ho See Beng: Mr Speaker, Sir, I would like to ask the Minister whether the PSC Chairman, in reviewing the salaries of the officers in the Professional and Administrative services, has taken into consideration the fact that, as the top echelons in the Professional and Administrative services, apart from their salaries they also have position, power and prestige. This, no money can buy. So a person cannot expect to have gain and fame. I would like to know whether the PSC Chairman has taken this into consideration.

Dr Tony Tan Keng Yam: Mr Speaker, Sir, the answer is yes. Unfortunately, even after taking these other factors into account, the sad fact of life is that the disparity in remuneration between what a good graduate can earn in the public sector and in the private sector is so large that it is not fair to expect civil servants in large measure to make that sacrifice to remain in the Civil Service. No one who makes a career in the Civil Service or in the public sector, whether as a politician or as a civil servant, expects that he or she will be able to obtain the high financial rewards which a good graduate can ear in the private sector. But no one who contemplates a career in the Civil Service should be asked to receive a remuneration whereby he has to see his family suffer or whereby he cannot provide adequately and comfortably for his family. I think it is foolish economy for us to withhold what the Civil Service deserves. If we cannot get good people to run the Government, it is Singapore who will be the loser in the long run.

4.21 p.m.