CONSTITUTION OF THE REPUBLIC OF SINGAPORE (AMENDMENT) BILL

Order for Second Reading read. 4.47 pm

The Deputy Prime Minister (BG Lee Hsien Loong): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, this Bill seeks to amend the Constitution to delink the grade and the office of Permanent Secretary. There is also a separate amendment consequential to the abolition of appeals to the Privy Council. The amendments to the Constitution are: (a) Clause 2 - an amendment to Article 34(2)(a); (b) Clause 3 - a repeal of Article 100; and (c) Clause 4 - a new Article 111A.

Article 34(2)(a) of the Constitution, as currently worded, provides for appointments to the grade of Permanent Secretary to be made by the President, acting in accordance with the advice of the Prime Minister, from a list of names submitted by the Public Service Commission. The grade of Permanent Secretary exists only in the Administrative Service and Administrative (Foreign Service) Schemes, where grades at Superscale C and above are designated as Permanent Secretary grades.

Because of Article 34(2)(a), an officer in the Administrative Service or the Administrative Service (Foreign Service Branch) can only be promoted to the grade of Superscale C if he is also appointed a Permanent Secretary. This was not a constraint when the civil service was small, most functions were handled by Ministries, and few officers reached Superscale C. Today, the range of top jobs in the civil service has widened, but the number of Ministries and Permanent Secretary posts has remained the same. Many senior Administrative Officers are not performing the statutory duties of a Permanent Secretary, but are holding posts which justify Superscale C grades. For them, the term "Permanent Secretary" is a misnomer.

The Chief Executive Officers (CEOs) of large statutory boards, like MAS, HDB or NUS, have jobs which are equivalent in size to or even larger than some Permanent Secretary posts. Many statutory board CEOs are Administrative Officers. But Article 34(2)(a) does not allow us to promote such an officer to Superscale C, unless he is at the same time appointed a Permanent Secretary, even though he does not run a Ministry.

Secondly, large Ministries like Mindef, Ministry of National Development or the Ministry of Finance, require several Administrative Officers of at least Superscale C grade, but only one or at most two Permanent Secretary posts. Article 34(2)(a) prevents us from promoting Deputy Secretaries in these Ministries to Grade C and above, unless they become the Permanent Secretary or are posted out to another Ministry. Deputy Secretaries can be at most Superscale D1, even if the Permanent Secretary is Staff Grade.

These rigidities hinder the timely advancement and flexibile deployment of able Administrative Officers. Clause 2 of the Bill therefore seeks to amend Article 34(2)(a) to provide for appointments to the office of Permanent Secretary, instead of to the grade of Permanent Secretary, to be made by the President, acting in accordance with the advice of the Prime Minister, from a list of names submitted by the Public Service Commission.

In future, the term "Permanent Secretary" will refer only to Administrative Officers heading a Ministry, ie, those holding the office of Permanent Secretary. The actual grade held by a Permanent Secretary will vary depending on the seniority of the officer and the size of the Ministry. This delinking of rank and grade will offer more flexibility in the promotion and deployment of Administrative Officers in the entire public sector and within a Ministry.

Despite its rigidity, the old Article 34(2)(a) did serve a function, as it vested the final decision as to whom to promote to Superscale C in the Administrative Service with the Prime Minister, who would promote from a list put up by the PSC. This is right as the Prime Minister and Cabinet work closely with the Permanent Secretaries and senior civil servants, and are in a position to make first hand assessments of the abilities and performances of these senior officers. On its own, the revised Article 34(2)(a) would no longer provide for the Prime Minister to decide on promotion of officers into the topmost echelons of the Administrative Service.

To remedy this, clause 4 of the Bill seeks to insert a new Article 111A to provide for the designation of a "Significant Grade" in the Administrative Service and Administrative (Foreign Service) Schemes, and to require promotions or appointments to that Significant Grade to be made by the President, acting in accordance with the advice of the Prime Minister, from officers nominated by the Public Service Commission.

The Significant Grade will be established by gazette notification, and can be raised from time to time. The status quo would be to set the Significant Grade at Superscale C, the present lowest Permanent Secretary grade. However, in today's environment, a more realistic benchmark grade for Permanent Secretaries is Superscale B. This is because even with the latest salary revisions, Administrative Service Superscale salaries still lag too far behind the private sector. To remedy this solely through another major across-the-board salary adjustment in the Administrative Service would be too indiscriminate an approach. Instead, the Government will raise the benchmark Permanent Secretary grade from C to B, and correspondingly revise the establishment grades of the top jobs, especially Permanent Secretary and statutory board CEO posts.

The Government will therefore gazette Superscale B as the Significant Grade after this amendment comes into effect. While Superscale B will be the benchmark grade for Permanent Secretary appointments, this does not mean that in future every officer appointed to be a Permanent Secretary will automatically be promoted to Superscale B, or that every Permanent Secretary post will have the same establishment rank of Superscale B. Not all Permanent Secretary posts are the same size, and not all officers appointed to the same post necessarily must hold the same rank. The benchmark grade is a flexible norm, not a fixed universal rule.

This Constitutional amendment is just the first step in overhauling the personnel management system in the civil service and bringing it more in line with present day private sector practice. As the President stated in his Address to Parliament in 1992, I quote:

`We must make fundamental changes to the management of the Singapore civil service and free up its personnel administration. The public sector must become a more responsive and competitive employer without compromising the integrity and impartiality of the civil service and the statutory boards.'

The Government will introduce further Constitutional amendments within the next few months, to decentralise the personnel management system, devolve some of the powers of the Public Service Commission, the Education Service Commission, and the Police and Civil Defence Services Commission, and give line managers greater flexibility, responsibility and accountability in managing human resources.

Finally, clause 3 of the Bill seeks to repeal Article 100 as a consequence of abolishing appeals to the Privy Council. It arises from the repeal of the Judicial Committee Act (Cap. 148 of the 1985 Revised Edition) through the Judicial Committee (Repeal) Bill 1994 which seeks to abolish all appeals to the Judicial Committee of the Privy Council. The Judicial Committee (Repeal) Bill 1994 was introduced in Parliament on 17th January 1994 and was passed by Parliament on 23rd February 1994.

Sir, I beg to move.

Question proposed.

Mr Chew Heng Ching (Eunos GRC): Mr Speaker, Sir, I support the Bill mainly because our civil service has expanded and our Ministries are handling a lot more functions than before. The amendments therefore create another height for career advancement of officers in the Administrative Service and the Administrative Service (Foreign Service Branch). This provides a further opportunity to retain key senior officers in our two premier services in the civil service.

Sir, the amendment is not new when one looks at what is often done in the private sector. As a corporation expands, inevitably posts and ranks are created or added to the hierarchy in order to retain good executives or provide career advancement for them. In the case of corporations that follow the American system, an Executive Vice-President's (EVP) post is normally created to fill the gap between the President and the Senior Vice Presidents. As the corporation further expands, and because there can only be one President in an organisation, a number of Senior EVP posts are created to provide further room for the EVP to move upwards. In the case of corporations that follow closely the British system, like the Japanese companies, they do not normally practise the American system of calling themselves Presidents, EVPs, Senior VPs, VPs and so on. They tend to align themselves with the British system and call themselves CEOs, Presidents, MDs and General Managers. Because there can only be one man at the top, they too create posts or ranks in between to achieve the same end. As they expand, they call themselves Group MDs, Senior MDs, Assistant MDs and so on.

Sir, I can understand the need to introduce a Significant Grade in the two premier services. It provides an additional safeguard for the Prime Minister and his Cabinet as they will have a say on the promotion of officers to that grade. This is also sensible because the Prime Minister and his Cabinet work closely with these senior civil servants and are therefore in a good position to make first hand assessment of their abilities and performance. But, Sir, the only setback to this arrangement, as proposed in the Bill, is the cumbersome procedure of having to gazette the changes of this Significant Grade from time to time. Hon. Members of this House, I am sure, will agree with me that with the volume of legislative materials that we have to absorb each year, there is a high probability that gazette notification of this kind can inadvertently miss our attention.

Sir, I believe the best long term solution is to review the hierarchy of grades in the two Administrative Services. Like what private sector corporations have been doing, introduce more grades to provide for adequate career advancement of serving officers. We have presently in the Administrative Service the existing Staff Grades I, II and III, and Superscale Grades A, B, C, D1, D, E, F and G. Sir, I would like to suggest that the Public Service Commission consider introducing Staff Grades IV and V and Superscale Grades A1, B1 and C1 to the system. We can set the Permanent Secretary Grade at A or A1, and not necessarily at B as proposed now. This can also be the Significant Grade. This will provide sufficient height for career advancement of promising Administrative Officers and hopefully help to check the attrition rates of mid-career officers as well as provide the necessary checks and balances to ensure integrity of our civil service.

Mr Chay Wai Chuen: Mr Speaker, Sir, I wish to speak in support of the Constitution of the Republic of Singapore (Amendment) Bill in the name of the Minister for Finance.

This Constitutional amendment Bill is really in two pieces: one, for the repeal of Article 100 of the Constitution and the other, for a new Article 111A which, in essence, introduces a Significant Grade to the Administrative Service.

I will first make my comments on the first part, ie, the repeal of Article 100. This Article has provided for the appeals to the Privy Council from the Supreme Court. This House has already debated at some stage about the abolition of appeals to the Privy Council. I believe this is necessary at some stage. Our legal system must develop with reference to our own needs and changes. We have been independent for more than 30 years and our social, political and economic changes are now moving at greater variance from Britain.

With these developments, there have been the confidence and growth of our own legal system. I am sure it is a step in the right direction. Many Commonwealth countries have already done so long ago. Notwithstanding this, I understand that any existing appeal or application outstanding will still be allowed to the Privy Council before the commencement of the Act.

On the second part of this amendment, I am not so clear. I can understand the rationale why it is necessary to delink the Superscale C grade of the Administrative Service with the office of the Permanent Secretary. The Minister has given good reasons for that.

First, I wish to point out that nowhere in Article 34(2)(a) of the existing Constitution is there any specific mention of any link of the grade of the Permanent Secretary to the Superscale C grade. I read Article 34(2)(a) as follows:

`Appointments to the grade of Permanent Secretary shall be made by the President, acting in accordance with the advice of the Prime Minister, from a list of names submitted by the Public Service Commission.'

While I can understand the rationale of delinking the office of the Permanent Secretary to Superscale C, as explained by the Minister, I do not understand why it is done by introducing a Significant Grade. Why are we untying a knot only to tie it again? Why can the Minister not consider untying the office of the Permanent Secretary by not having it specifically pegged at the grade of Superscale C? Why must we introduce another Significant Grade which, we are told, will be a Superscale B? Would the Minister explain the rationale of introducing this Significant Grade? And why are there some officers now "significant"? By this, I mean that only a select group of the existing Permanent Secretaries will be in this grade. Are we linking the Significant Grade to the office of some Senior Permanent Secretaries? Why can we not simply delink the Superscale C with the office of the Permanent Secretary? Then, an Administrative Officer can be promoted to any Superscale grade without necessarily being constrained by the Permanent Secretary's salary scale.

The Minister has said that the Government will raise the benchmark of Permanent Secretary grade from Superscale C to B, but not all Permanent Secretaries will automatically be promoted to Superscale B. In other words, they can be at Superscale C which is not a Significant Grade, although that job is obviously significant.

The core of Administrative Officers will now be in two groups - those in the Significant Grade and those not in the Significant Grade. Coupled with the present Timescale and Superscale grades, there will now be three groups: Timescale, Superscale and Significant Superscale officers. If this is the case, why not simply cut the Gordian knot and let every Administrative Officer's salary be determined by his ability and experience, irrespective of whether he is a Permanent Secretary, which is an appointive rank and office, or Chairman or CEO of EDB or MAS? There will be no more glass ceilings. This will really ensure a greater flexibility in deployment and promotion of Administrative Officers in the active public sector which, I believe, this Bill serves to provide. It will also ensure all Administrative Officers to rise to their own level of competence.

Article 34(2)(a) presently allows for the appointment of the grade of the Permanent Secretary to be made by the President, acting in accordance with the advice of the Prime Minister, from a list of names submitted by the PSC. With the present amendment of Article 34(2)(a), only the word "grade" has been amended to read "office". The powers and responsibility of the President and the Prime Minister remain intact. Hence, it is not clear to me what is meant when it is mentioned that on its own, the revised Article 34(2)(a) would no longer provide for the Prime Minister to decide on appointments or promotions of officers into the top most echelons of the Administrative Service.

I would be grateful for the Minister's clarifications.

BG Lee Hsien Loong: Mr Speaker, Sir, Mr Chew Heng Ching has suggested that we include Staff Grades IV and V and new Superscale Grades C1, B1 and A1 for the Administrative Service. We already have Staff Grades IV and V in our structure. However, no officer has yet reached these grades, but there is no hindrance. As and when officers are deemed to be ready to be promoted to these grades, I am sure the Public Service Commission will do so.

As for new grades A1, B1 and C1, I think what the Administrative Service lacks is not the number of grades but grades pegged at the right level and promotions which are quick enough and responsive enough in order to adjust to private sector's salary movement, so that good officers are rewarded in the Administrative Service. You can do it by having two grades and promoting people once a year. Or you can have it by having one grade and promoting people every other year. It is a question of how many steps we want to take to go up the stairs.

We do not lack for number of steps. From G to Staff Grade I, we already have 10 grades - Staff Grade I, A, B, C, D1, D, E1, E, F, G. So assuming that you make those 10 grades in 15 or 17 years, that is, one promotion every year or every year and a half, which I think is reasonable. The gaps between the grades are not excessive.

Our problem is after the salary revision, which we implemented in January, if you compare the civil service Permanent Secretary Grade C with a typical private sector individual professional, aged about 45, you would find that the Permanent Secretary Grade C ranks somewhere way down the list, 500 or 600 down the list. If you tell a young man, you join the civil service, you work hard, you show ability, you will rise to the top at the age of 45, you will rank about 400 or 500 compared to your peers of the same age group, he is not going to join you. And even if he has been persuaded to join you by a PSC scholarship, as soon as he enters the service, he looks around. Being a bright young man, he does his calculations. He says, "If I work hard, I will end up there where you are. Do I want to be there, you are stuck with a golden handcuff of a pension? My handcuff is not yet golden. Should I not go?" So, therefore, they will leave. And, in fact, we are already seeing young officers in the Timescale leave because in Singapore, if you are good, you are known very quickly. If you go into a Ministry like National Development or Trade and Industry, or into a statutory board like EDB, you have contacts with the private sector, they know you, they size you up, they make you an offer.

So we have to adjust. This is a problem more with the Administrative Service than with the Ministers. Because with the Ministers, after the last salary revision, I think we are at a sustainable relativity compared to the private sector. Our concern is to make sure that this relativity is maintained as salaries move up in the private sector, that this relationship is still kept, and the public sector adjusts. Or if the private sector goes down in a recession, the public sector also must go down correspondingly.

So the Ministers are generally in line, that means, Staff Grade II and above. At Superscale C and below, the civil service is still considerably out of line. Therefore, we have to make an adjustment for the civil service. We have two ways of doing this. One, we just make a salary revision - Superscale C will now be 30% more than it used to be, and we pay everybody more. The second way is to change the benchmark. A Permanent Secretary, I will now consider to be a Superscale B post, which means that I will promote people faster, I will assess people more generously in terms of grades and, therefore, when a person reaches the Permanent Secretary rank, he will get to Superscale B faster. Therefore, I will be able to reward deserving officers more, and more responsively. We have decided to go the second route.

This is really a digression from today's subject but it will be the subject of a White Paper - Ministers' salary benchmarks as well as Administrative Service's salary benchmarks - which we intend to table in Parliament within the next month or two, at the latest, and which will be debated in Parliament.

Secondly, Mr Chay asked whether we need the Significant Grade because Article 34(2)(a) does not establish a link between the Permanent Secretary grade and Superscale C. There is no definition in the Constitution that the Permanent Secretary grade is Superscale C. But in the Administrative Service's terms of service, it is understood that the Deputy Secretary grades range from G up to D and D1, and from C, B, A onwards are Permanent Secretary grades. Therefore, in the working of Article 34(2)(a), officers who are promoted to the grade of Superscale C have their promotions really on the authority of the Prime Minister rather than of the Public Service Commission. Ceremonially, they are appointed by the President.

Under the new Article 34(2)(a), we say to the "office" of Permanent Secretary. So if you are in a big Ministry, like Finance or Defence, with a Staff Grade Permanent Secretary, and you rise up in that hierarchy, your first appointment as Permanent Secretary may not come until you are in Staff Grade. So you will be promoted to Grade C, Grade B, Grade A, without the Prime Minister's intervention or authority, and only when you reach Staff Grade will the appointment come from the President, on the Prime Minister's advice.

We want to preserve that entrance-gate check at Superscale C where the Prime Minister will be the one who will decide who comes past that point. We are not saying that you have to be a Permanent Secretary to come past that point. You may be a Deputy Secretary promoted to Superscale C. But who makes that promotion? Today, it is the Prime Minister. So under the new arrangement, it will also be the Prime Minister.

I think it is good to define a Significant Grade in this way. As I explained, we intend to introduce legislation to amend the Constitution to devolve the powers of the PSC and some of the other Commissions to various other agencies so as to free up the system of personnel management of the civil service. In doing this, we need safeguards. One safeguard which we will introduce will be that the powers which can be devolved will only be those which pertain to officers below the Significant Grade. So if you are in or above the Significant Grade, then you are managed by the PSC, because you are at the very top, you are among the key people, and it is important to have direct management from the PSC, which is the constitutionally appointed authority. If you are below that grade, then the Executive will have powers to delegate and devolve away from the PSC your authority of appointments or promotions over recruitment, over disciplinary matters as well, to other agencies, personnel boards, which will be appointed for this purpose. So the Significant Grade will serve another function in that respect. That is why the legislation is drafted this way.

Mr Speaker: The Question is, "That the Bill be now read a Second time."

A Division will be taken to ascertain that the Second Reading of the Bill is supported by the votes of not less than two-thirds of the total number of Members of Parliament, which is 54 Members, pursuant to Article 5(2) of the Constitution. Ring the Division Bells.

Question put, "That the Bill be now read a Second time."

Division taken: Ayes, 67; No, Nil; Abstentions, 2. Ayes Ayes (cont.) Abdullah Tarmugi Loh Meng See Ahmad Mattar Low Seow Chay Chandra Das, S Mah Bow Tan Chay Wai Chuen Mohamad Maidin B P M Chen, Bernard Ong Chit Chung Chen Koon Lap, Kenneth Othman bin Haron Eusofe Chen Seow Phun, John Peh Chin Hua Cheo Chai Chen Sidek bin Saniff Chew Heng Ching Sinnakaruppan, R Chin Harn Tong Sung, Peter Chng Hee Kok Tan Cheng Bock Ch'ng Jit Koon Tan Keng Yam, Tony Chong, Charles Tan Soo Khoon Choo Wee Khiang Teo Chee Hean Davinder Singh Teo Chong Tee Dhanabalan, S Umar Abdul Hamid Goh Chee Wee Vasoo, S Goh Chok Tong Wan Soon Bee Goh Choon Kang Wang Kai Yuen Harun bin A Ghani Wong, Aline K Heng Chiang Meng Wong Kan Seng Ho Kah Leong Wong Kwei Cheong Ho Peng Kee Yao Chih, Matthias Ho Tat Kin Yap Giau Cheng, Eugene Ibrahim bin Othman Yatiman Yusof Jayakumar, S Yeo Toon Chia Ker Sin Tze Yong-Boon Yeo, George Koh Lip Lin Yu-Foo Yee Shoon Koo Tsai Kee Zulkifli bin Mohammed Lau Ping Sum Lee Hsien Loong No Lee Kuan Yew Lee Yiok Seng Nil Lee Yock Suan Leong Horn Kee Abstentions Lew Syn Pau Lim Boon Heng Chiam See Tong Lim Chun Leng, Michael Low Thia Khiang

Mr Speaker: The Second Reading of the Bill has been carried by the votes of not less than two-thirds of the total number of Members of Parliament.

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. - [BG Lee Hsien Loong].

Bill considered in Committee; reported without amendment.

Third Reading

Mr Speaker: Third Reading, what day?

BG Lee Hsien Loong: Now, Sir. I beg to move, "That the Bill be now read a Third time."

Mr Speaker: A Division will be taken to ascertain that the Third Reading of the Bill is supported by the votes of not less than two-thirds of the total number of Members of Parliament, which is 54 Members, pursuant to Article 5(2) of the Constitution. Ring the Division Bells.

Division taken: Ayes, 67; No, Nil; Abstentions, 2. Ayes Ayes (cont.) Abdullah Tarmugi Loh Meng See Ahmad Mattar Low Seow Chay Chandra Das, S Mah Bow Tan Chay Wai Chuen Mohamad Maidin B P M Chen, Bernard Ong Chit Chung Chen Koon Lap, Kenneth Othman bin Haron Eusofe Chen Seow Phun, John Peh Chin Hua Cheo Chai Chen Sidek bin Saniff Chew Heng Ching Sinnakaruppan, R Chin Harn Tong Sung, Peter Chng Hee Kok Tan Cheng Bock Ch'ng Jit Koon Tan Keng Yam, Tony Chong, Charles Tan Soo Khoon Choo Wee Khiang Teo Chee Hean Davinder Singh Teo Chong Tee Dhanabalan, S Umar Abdul Hamid Goh Chee Wee Vasoo, S Goh Chok Tong Wan Soon Bee Goh Choon Kang Wang Kai Yuen Harun bin A Ghani Wong, Aline K Heng Chiang Meng Wong Kan Seng Ho Kah Leong Wong Kwei Cheong Ho Peng Kee Yao Chih, Matthias Ho Tat Kin Yap Giau Cheng, Eugene Ibrahim bin Othman Yatiman Yusof Jayakumar, S Yeo Toon Chia Ker Sin Tze Yong-Boon Yeo, George Koh Lip Lin Yu-Foo Yee Shoon Koo Tsai Kee Zulkifli bin Mohammed Lau Ping Sum Lee Hsien Loong No Lee Kuan Yew Lee Yiok Seng Nil Lee Yock Suan Leong Horn Kee Abstentions Lew Syn Pau Lim Boon Heng Chiam See Tong Lim Chun Leng, Michael Low Thia Khiang

Mr Speaker: The Third Reading of the Bill has been carried by the votes of not less than two-thirds of the total number of Members of Parliament.

Bill accordingly read a Third time and passed.