COMPETITIVE SALARIES FOR COMPETENT AND HONEST GOVERNMENT (MOTION)

Order read for Resumption of Debate on Question [31st October 1994],

"That this House endorses Paper Cmd. 13 of 1994 on "Competitive Salaries for Competent and Honest Government" as the basis for setting salaries of Ministers and senior public officers.". - [Prime Minister].

Question again proposed. 1.27 pm

Mr Loh Meng See (Kampong Glam GRC): Mr Speaker, Sir, I rise to support the motion in the name of the Prime Minister.

Sir, the trouble with salary administration is that everyone has an opinion of his own. He thinks he is an expert. What we really need are a few wise men to make the decision with all the relevant data and personal information of the individuals and based on the availability, I think the Government, led by the Prime Minister, is faced with a very serious problem in attracting, recruiting and retaining Ministers and senior public officers. It is only when the very person who is in the position to deal with the problem will know the problem best and how to deal with it. What is important for us, both Members of this House and the members of the public, is to judge the Government by the outcome of its performance, rather than to put obstacles in front of the Government and make the job of succession planning even more difficult. Therefore, I do not agree with the suggestion to refer the issue to a Select Committee or to have it as an issue for referendum.

Sir, we have to compete for top talent which is really in short supply in Singapore. It is a talent that we cannot import. We have to choose from our very own. Here we are not talking about ordinary people. We are talking about competent leaders. We need leaders who are visionaries. We are not looking for managers to manage. I agree that sometimes the Government may have been over-emphasising on the past achievements and the academic qualifications of our officers. But I think what the Government can do is to understand that by competency, we need leaders who are able to cope with the future. Because having competent leaders will lead Singaporeans to be able to deal with the issues in the future.

The White Paper to this House is really to let us Singaporeans air our concerns on the issue of salaries for Ministers and senior public officers. Honesty is the best policy. It is important for us to have it in the most transparent and above-board manner.

There are two perspectives on this question of Ministers' salaries. One is the salary received by the Ministers and senior public officers and the other is the cost to the State. I think Members of this House and the public may have over-emphasised the perspective of the salaries received by the Ministers and senior public officers. We see them as big fat salaries. They do not understand that the Government has chosen a system of remuneration that is highly monetised. In other words, the Government is paying more cash and less fringe benefits to the Ministers and senior public officers. But the cost to the State is least emphasised. As the Prime Minister has told us yesterday, we are only paying up to $22 million for the whole leadership. I think it is important for us to ask ourselves whether that is the amount that is worth paying. If we compare with the size of the Cabinet of other countries, and if we were to compare the many duties of the top civil servants in Singapore, they are actually holding multiple functions, multiple portfolios. And I would say that the productivity of each of these office-holders is very high indeed.

The other point that many of us fail to appreciate is that we have a very lean organisation in the Singapore Government. It is a Government that depends on very few people to run the country. It may appear that, in per head terms, the salary received by individual Ministers or senior public officers is high, but as a cost to the State, I would deem it to be very cost-effective indeed.

Sir, many of us may be affected by the thinking in observing the first generation Ministers, and we remember the many sacrifices made by them. But my observation is that maybe we have asked them to make too great a sacrifice. We may not have been fair not only to them individually, but also to their families. The Ministers gave the prime years of their lives to this Government, to this country. Unfortunately, our system does not recognise them for their past contribution. If they had been top executives in private companies, they would have kept their shares. Their shares would have appreciated in value today, and they would be quite well off. But our system in Government does not recognise this.

I am very disturbed by the serious allegation made by Prof. Walter Woon yesterday. The allegation that he has made against certain civil servants is that they appear to be buying their time and they do not deserve the salary that they are receiving. If Prof. Walter Woon knows of such persons, then the right thing he should do is to help the Government get rid of these people rather than to make a serious allegation which, in one broad brush, has affected the whole top echelon of the civil service. It shows a lack of appreciation and, to that extent, ingratitude to the very good work done by the civil service and the contribution that it has made to Singapore.

I agree that, sometimes, there is comparison between the private sector and the public sector with regard to the security of tenure of office. But how do we change? How do we get the civil service to change if we are not able to allow them to compete, to pay competitive salaries? We should create a situation whereby there are more people competing for jobs against some places, then I think the civil service will be in a better position to get rid of the non-performers. So it is a situation whereby if we want the civil service to have a merit system, to have the private sector discipline, then I think the first thing that we should help the civil service and the Government to do is to provide competitive salaries first. Allow them to have the ability to attract the people and I am very sure that if they have more choices available, then obviously the less good performers would be removed. But if you do not have that good and happy position of getting more people to select from, then I am afraid that you may have to make do with what you have.

I agree that we have to be very careful in overpaying executives, in paying senior officers because, sometimes, if they are comfortable and not so hungry in their work then, of course, complacency sets in and performance standards will fall.

The other issue I would like to suggest is to really modify the pension scheme. In fact, as a cost to the State, the pension scheme really costs a great deal to succeeding governments. Maybe some sort of arrangement could be made whereby there would be the conversion of pension money to immediate salary compensation. The second point is, as Dr Lee Tsao Yuan has mentioned yesterday, in the private sector, they practise a flexible salary system. Hopefully, the Government can set the example by also paying the total salary, a greater proportion of which is in a variable form so that we do not lock in a very high base salary for the Government Ministers and top public officers.

Sir, not too long ago, there was only one salary grade for Ministers. I am happy that in the White Paper, there are the overlapping grades in the grade structure. In fact, there are two or three grades, as the case may be within each rank. This grading system will help the Government to decide on the position of each Minister or senior public officer based on seniority, portfolio, competence and performance. And I think that is a good thing. Many people fail to understand that a Minister takes quite a while to reach the Ministerial grade and, in fact, most of them do not get into the Minister's rank immediately. This is an issue which I hope the people will understand.

Sir, the final point is that, as the Government hopes to obtain external parity with the private sector, it should not fail to consider the internal equity to the rank and file in the Government service. We should be concerned about the morale of the middle managers and the junior officers in the Government service. We will have to appreciate that in the Service, it is group effort and team work that matter. And we do not unwittingly create a system whereby the salary makes for very individualistic people who only worry for themselves and fail to consider that of their colleagues and subordinates. They are all in the same boat. They should all sink and swim together.

Mr S. Dhanabalan (Toa Payoh GRC): Mr Speaker, Sir, I want to confine what I have to say to the benchmark for Ministers' salaries.

The White Paper's proposal is to average the earnings of the top four earners in six professions, that is, 24 earners and pay Ministers two-thirds of this average. Pegging at two-thirds of the top 24 would, in fact, work out to the average of the top 15 to 20 persons in each profession, that is, the average of about 120 persons in the six professions. Perhaps, putting it this way would be less eyebrow raising.

But whichever way it is presented, the vast majority of Singaporeans do not earn anywhere near this amount. The figures to them are mind-boggling. They probably never even realised that there are people who earn these types of incomes. They can understand people who own properties and businesses having huge incomes. But that people who work are actually paid these salaries and fees is something that is beyond their capability to grasp. And when Ministers' incomes, as is suggested, are pegged to this, many people get apoplectic.

We are conducting a very bold experiment in Singapore. We are attempting to persuade the electorate to think rationally and logically and see the total picture and assess the value of good political leadership for the nation.

The general election is the right forum to determine the electorate's support because it puts this issue in a total and correct context. In fact, other countries which have a much longer history of democracy and a better educated population dare not even broach the subject as one that should be debated and decided by the electorate in the general election.

I am not sanguine that the vast majority of Singaporeans can see and understand the issue. Nevertheless, we ought to try and treat the electorate as adults. We can of course resort to subterfuge and secrecy and make hidden payments and perks and keep the nominal salary of Ministers at a low level. But that is not our style and it would be an insult to the integrity of our leaders.

Speaking for myself and my colleagues, those who are still in the Cabinet and those who have left for the private sector, I can say that salary was never a consideration in our decision to enter politics. In fact, when the late Mr Hon conveyed the PM's wish for me to join the Cabinet as an office holder and I agreed, I did not even know until the day before the press announcement whether I would be appointed Minister of State or Senior Minister of State or what my salary would be. And I think my colleagues can testify to similar experiences.

I know that there are many who are in the Cabinet today who can earn much more outside in the private sector than what they would be paid under the proposed scheme. And I also know that if they can get competent people in whom they have confidence to take over from them, they would be prepared to leave for the private sector for less than what they are getting today.

My own view for a long time on the salary for Ministers has been that Ministers must be paid adequately but not necessarily related to market or near to market rates for positions of similar responsibility. I have expressed this many times to the Senior Minister when he was Prime Minister and he always told me that I am unrealistic and that my thinking has been shaped by my years in public service and in GLCs.

I must say that over the years, I have had to change my mind, and I must confess with some regret. My change in view has come about basically as a result of my experience in trying to persuade successful Singapore professionals and executives who have the potential to become Ministers to consider entering politics. As I discussed with them, I discovered that the generation that comes after mine is far more intelligent and careful in assessing and weighing the pros and cons of giving up a successful career to enter politics. Compared with them, mine is a generation of wide-eyed innocent babes in the woods. With the exception of only one person, and he is more of my generation than the generation after mine, I have failed to persuade anyone to enter politics with a view to taking office. As I discussed with them, I found that the negatives just seemed too large for them.

First, there is the stress and responsibility of office. You are a Minister. You observe the ordinary Singaporean on his way to work, at work, at leisure, in the hawker centre and at home. You think of the economic and social problems that he or she will face that you are expected to anticipate by the policies that you help to formulate together with your colleagues. You think of how the ordinary person's life and routines and hopes and expectations can be completely thrown into disarray by events and forces beyond his or her control, but which you as a Minister together with your colleagues have responsibility for. You think of these things and you can be overwhelmed by how much things depend on you and your colleagues. Many do not want to take on such a responsibility.

Then there is the personal risk, the loss of privacy, the pressures on the family, even on the young children who are expected to be different because the father or mother is a Minister.

You also have the risk that some personal flaws will come to the fore in unforeseen situations and destroy you like some Shakespearean tragic hero. And over everything, there is the risk of a brutal and public rejection by the voters.

All these and more, people have mentioned to me. The people I spoke to are all earning more than what they can expect as Ministers. But loss of income has never been mentioned by them, but I do know that this must be a factor which they take into consideration, though it is not an important factor. But to the extent that salaries of Ministers is a negative factor, it adds to all the other negative factors.

As against all these stresses and risks of entering politics is the attraction of continuing in paths where these people have a track record of success.

I am not surprised that I have been so unsuccessful in persuading people or that, as the PM has said, we have not been able to identify and persuade one person per year of Ministerial calibre to enter politics.

There is little that we can do to remove the factors that dissuade people from taking the risk of running in an election with a view to taking office. These negative factors that I have mentioned are part and parcel of the job. It is only in the area of incomes that we can do something to mitigate the unattractiveness of politics to successful Singaporeans. To do nothing where something can be done would be irresponsible.

Even with the proposed benchmark, nobody that I have spoken to will accept the political challenge because the income is attractive. Only a sense of service, of wanting a hand in shaping the future of our society will bring the right people into politics. If, as a result of the system that we have and which we are fine-tuning through this White Paper, we find that people are attracted to politics by the income they can earn, then we are attracting the wrong type of people into politics. That is the irony of the system. That is why the selection process of candidates for Parliament, Backbenchers as well as those with the potential for office, is so important. And the People's Action Party has such a selection process.

The continuation of good political leadership depends upon the incumbents and they have to attract and induct new leaders who share the same competence, integrity, courage and spirit of service that the incumbents have. We run a high risk, high reward system. In the right hands, the system can enable the nation to scale new heights of success. At present and for the foreseeable future, it is in the right hands. The PM's job is to identify and persuade the right people to join him so that his team can ensure continuity as far into the future as is reasonably possible. We should give him the tools to get the job done.

Mrs Yu-Foo Yee Shoon (Yuhua): ( In Mandarin): Mr Speaker, Sir, if Singaporeans are unhappy or do not agree with the benchmarking of the Ministers' salaries as recommended by the White Paper, it is quite understandable.

First, they do not realize that this is a question of supply and demand of talents, neither do they understand the principle of scarcity. The talented people in Singapore are normally proficient in the major international languages. As Singapore is a metropolitan city, the people we have trained are of international standard, ie, the market for these talented people is very international. They can easily find a place in various countries in the world, which means that the talented people that we have trained can easily find good job opportunities in the USA, UK, Hong Kong and China. Because of this, their value is greatly enhanced.

However, most people do not understand that there is a great gap in the market value of the ordinary people and these specially trained professionals. The type of competition they face is different. For the ordinary workers, competition comes from China, Taiwan, East Asia and even South America, Middle-East. To them, competition does not enhance their value. On the contrary, they have to maintain a global level of competitiveness. The competitions are moving in two different directions. So, the ordinary people cannot accept the fact that in the face of international competition, they are actually losing out, while the professionals are gaining capital for advancement. Therefore, we have to explain to the ordinary workers the question of supply and demand of talents, and the theory of market economy.

Another point is that many people fail to understand why we are having the problem of shortage in talents. With regionalization and the flourishing economies of the region, these talents are frequently absorbed by the multi-national corporations, and many of them are even leaving their employment to start their own enterprises. The business opportunity now is truly unprecedented. From the international financial magazines, we learn that the salaries of Chief Executive Officers of the big international enterprises are measured not in terms of thousands or millions, but in hundred millions and even by billions. So, if we are to compare the salaries of these international CEOs with our ordinary workers, the gap will be even wider.

Now, the White Paper proposes to benchmark the salaries of our Ministers based on the leading local professionals, and I feel it is very reasonable.

Another thing is how do we make the people understand the consequences of this shortage in talented people. Sometimes we may forget that the quality of these leaders is directly linked to our future and the future of our children. In fact, looking for the right and suitable talents to govern the nation is to create more wealth for the nation and the people. Therefore, we must make the people realize that by getting the best talented people to be our leaders, it is the people who will get the benefits in the end, and not just these leaders. More often than not, we are emphasizing too much on economic benefits, and often believe that salary is the determining factor of the quality of our political leaders and civil servants. I feel we should also attach more importance to the spiritual well-being of our people and their mission to serve. The people we are looking for should not only be capable, talented but also possess a social mission to serve society and the people. They should be dedicated to looking after the well-being of the people. Therefore, when we are selecting potential Ministers, we should look not only for talent, capability and qualification, but also integrity and high moral standard. With these qualities, we can be assured that when our nation is prosperous and wealthy, our leaders will not indulge in extravagant and dissipated lifestyles and squander away our hard-earned money. When we are poor, our leaders should have the courage and strong will to see us through, and will not falter in their determination. When we are faced with serious crisis and challenge, our leaders will be able to stand firm and will not succumb to pressure.

I personally agree with the principle of the White Paper which sets out a long-term salary plan for our Ministers and top civil servants. I feel that this is better than having to come back to Parliament every year, or from time to time, to revise their salaries. Therefore, this long-term and transparent formula to set out their remuneration is most appropriate. We all know that other countries are using various methods. Some provide for entertainment allowances which may run into hundreds of thousands, or free cars and houses to camouflage the Ministers' salaries. This is not a good method. Therefore, in Singapore, we use a transparent formula where everything is included in the salary. I feel that this is more sensible.

At the same time, we all know that the risk and responsibility the Ministers have to take is much heavier than that of a CEO in a private enterprise. At every General Election, they have to face the voters who will decide their future, ie, whether they will be returned to office after each General Election. The Ministers have to sacrifice their privacy and time, as well as those of their families.

In addition, the social pressure they have to encounter comes from all the people in the country and not just the directors, shareholders and customers of the company. Their decisions affect the quality of life of all the people in the country, and even the future of the country. As such, I support the long-term plan of the White Paper. However, I suggest that a high-level supervisory committee be set up to evaluate the salaries of the Ministers and top civil servants, so that our people will understand the manner in which the Ministers' salaries are linked to the private sector. At the same time, the committee will be able to look into the details arising from the implementation of the long-term plan and formula.

Finally, I wish to stress that when the Government decides to pay a higher price to attract potential Ministers and top civil servants, it should also emphasize the need to devise a more comprehensive plan to enhance the assets of the people, ie, to enable the ordinary people to receive better technical training, to have better means of livelihood and to improve their standard of living. Through these asset enhancement schemes, such as the issue of Telecom shares to the people when the TAS was privatized. I hope that when the other statutory boards are privatized, we can distribute more assets to our people. At the same time, as we are engaged in debates over our transport problems, the Government should set aside more money to improve our public transportation system so that the ordinary people and workers will enjoy more convenient means of transport. As for creches and child-care centres, the Government should be more generous in its funding of such facilities which will particularly benefit the working mothers.

If our people feel that they do have a share in the prosperity of Singapore they would be glad to support the White Paper.

Mr Chiam See Tong: Sir, may I get a clarification from the Member for Yuhua? I heard her speech through the interpretation. According to the interpreter, the Member said that CEOs' salaries in multinational companies amount to millions and even billions of dollars. I have hope I got it correct. May I get a clarification whether these MNCs are situated in Singapore or elsewhere and how are these millions and billions of dollars being paid? Are they being paid in Singapore dollars, American dollars, Indian rupees or what?

Mrs Yu-Foo Yee Shoon: ( In Mandarin): I mentioned just now that if you have read the foreign magazines on finance and business world, you will note that even the CEO of Walt Disney, which is a company dealing in entertainment and fun, his bonus and salary can be as much as a few hundred million US dollars. As for computer companies and other major enterprises, the CEOs' incomes are also very sizable. Even for someone who deals in fun and entertainment, he can get so much in remuneration, then what about our Ministers whose responsibility is surely not child's play? They are charged with the heavy responsibility of looking after the survival of the country and the well-being of the people in the country. They have to see to it that the people are fully employed. So I feel that the talents that we want should be of international standard. Because Singapore is an international city, the professionals we train are also of international standard. Sometimes I have to explain to our workers why there is a big gap between the salary of ordinary workers and the top professionals. This is an unfortunate reality because the professionals' competition is international and compare upwards with the professionals in other countries. On the other hand, the ordinary workers compare downwards with their peers. It is a reality, although it is an unfortunate one. That is why I emphasized just now that the Government should provide more facilities and training opportunities so that our workers would also have a chance to upgrade their standard of living.

I base my comparison on reports carried in the foreign magazines. So if the Opposition Member has the time, he should try and read more of these financial magazines.

Mr Low Thia Khiang (Hougang): ( In Mandarin): Mr Speaker, Sir, when I heard the Prime Minister's speech in this House yesterday, I was very shocked. It seems like the future of our country will be determined by how much salary we give to our Ministers and top civil servants.

The logic of the Prime Minister is that the higher the pay the better we can attract the top talents to govern the country and there will be continuous growth in the economy, more safeguards to the people. Otherwise, the future of the country will be bleak.

He went on to point out that corrupt practices among politicians in the United Kingdom was due to their salaries being too low. The Prime Minister also said that the most important question is what kind of people we want to rule the country. This is indeed a question worth considering.

On this question, my intuitive reaction is that I do not want people who look to money to run the country. These people will be weighing their losses and gains in terms of money and the policy they embrace will surely be profit-oriented. Even if it results in huge economic growth year after year, and the Government coffer greatly enriched, the livelihood of the people need not necessarily be improved because the formulation and results of their policies will be determined purely from the angle of economic benefits only.

If the Prime Minister is presenting this White Paper to set a benchmark for the Ministers' salaries based on the top earners in the private sector simply because the people with potential to be Ministers whom he contacted were not prepared to come forward to serve the nation due to the salaries being not sufficiently attractive, then I would suggest that he look again for some others who have the vision and are prepared to dedicate themselves to the nation.

If, after so many years of nation building, we cannot cultivate some talented people with dedication to serve the country, then I must say with great regret that our country is a failure.

It is like a successful entrepreneur who spent all his life working to amass upon himself great wealth, but he neglected other important things in life which money cannot buy, such as his family, the education and upbringing of his children, etc. In the end, he found himself having no successor.

If our country is facing this kind of problem today, the elites among our younger generation now would only look at money, then the PAP Government should make an overall review on whether their philosophy of running the country is out of balance, and whether it has been putting too much emphasis on utilitarianism and elitism.

The ancient Chinese philosopher Laotze said, "Do not esteem the wise so as to prevent strife among the people. Do not value the scarce goods so as to prevent robbery. Do not make desire visible so as not to disturb the minds of the people." Of course, we are not saying that we should not value the wise. What we are saying is that we should not over-emphasize elitism and materialism so that the desire of the people becomes stronger and stronger, resulting in their being obsessed with the desire for gain.

The Prime Minister also mentioned about corruption in society. Corruption arises because of greed and because of greed they become corrupted and polluted. So if we over-emphasise money and the society becomes such that so long as you have money you can call the shots, then no matter how much you pay them, they will be asking for even more. I think the complexity of this matter is far beyond the question of salary, as suggested by the Prime Minister. It is not that simple!

Mr Speaker, Sir, as a matter of fact, the sacrifice made by those who enter politics and serve the people cannot be measured by money alone. Some former Presidents of the United States of America were assassinated. Even President Clinton has also faced an attempt made on his life. This is a matter of life and death, not something which can be compensated by salary. So to debate on how to reduce the sacrifices of people who enter politics by monetary compensation is, by itself, an insult to the politicians and statesmen. We should adhere to the principle that so long as the Minister can maintain a comfortable lifestyle, with adequate safeguards for his present living and life after retirement, it would be sufficient to keep him working with peace in mind.

Since the Government is insisting on measuring in the light of utilitarianism, and has published the White Paper to support its argument, do allow me to present my views on the contents of the White Paper.

First of all, let me look at the question whether it is equitable to peg the Minister's pay with that of the private sector. The White Paper suggested taking the average income from six selected professions as the benchmark for the Ministers' salaries. This figure is $1.217 million. This is based on the average income from the six professions in 1992.

The present salary of Ministers is more than $60,000 per month, and it will be further increased after it is pegged with the private sector. According to the annual report of the Inland Revenue Authority of Singapore (IRAS), 141 residents of Singapore had income of more than one million dollars in 1992. But in 1993, some 394 people had income of more than $5 million.

So if we take these top four income earners in the six professions as the benchmark for the Ministers and top civil servants' salaries, and the top earners's income keeps on increasing substantially, then the salaries of the Ministers and top civil servants will be raised correspondingly. I fear that in future the salaries of Ministers and top civil servants will become a heavy burden to Singapore.

On the other hand, according to the 1990 Population Census, more than 70% of our workforce earn less than $1,500. So if you use the income of just a handful of super-high income earners as the benchmark, and ignoring the great disparity among the incomes of the people of Singapore in general, is it reasonable?

Secondly, looking at the nature of work and the motivation, the objective of the private sector is to make money. If an employee can make so much money for his company, he deserves to be paid a salary in accordance with his contribution. From a personal point of view, this is reasonable and just, seemly and fitting. But the motivation of the Ministers and the top civil servants is to serve the people. The nature of their work is to run the country with the power of the Government, and it is their job to run the country well. Just because the economy has been booming, the private sector has been reaping in huge profits, and their employees are getting high salaries, the Government wants to peg the Ministers' salaries to the private sector. Do not tell me that the Government is suffering from the politics of envy � envious of other people's high salaries.

With so much emphasis on the Administrative Service and the huge increase in the salaries of the top Administrative Officers, it seems that in future, the formulation and implementation of Government policies will rely substantially on these senior and superscale civil servants, and the Ministers will have these highly paid Administrative Officers to work for them, and their workload will therefore be reduced considerably. Why then are the Ministers getting a pay rise?

In order to show that they are "worth more than what they are paid" as mentioned by a Member in this House, these administrative elites sitting in the ivory tower will think of ways and means to make more profits for the Government. Yes, this will of course create more wealth for the country, but what will happen to the livelihood of the people?

Thirdly, work security. In Singapore, so long as the civil servants and Ministers do not make a serious mistake, their jobs can be said to be an "iron rice bowl". With the huge pay rises in recent years, this "iron rice bowl" has become a "golden rice bowl". This golden rice bowl, even in spite of an economic downturn, will be strong and stable, with no fear of being broken.

For instance, in 1985, when we were facing recession, many private sector employees were retrenched. They were completely helpless. But the Ministers and civil servants continued to get the same pay and they were enjoying themselves in the recession. Furthermore, so long as the Ministers have completed 10 years' service, they will get a handsome pension for their retirement. The employees in the private sector will have to work until 60 years of age before they can retire, and after that they have to fend for themselves.

According to the World Bank report, in Japan, and some successful economics in Asia, including Singapore, when a successful official retires, he will get a lot of rewards, much more than their salaries, benefits and allowances.

In most cases, our Ministers and top civil servants, after retirement, will be invited to take up richly-paid positions in the public or private sector. As such, our Ministers and top civil servants enjoy certain security even after their retirement.

The White Paper makes no mention of the special status and safeguards enjoyed by top civil servants and the Ministers, nor any objective comparison of the nature and risk of their job with that in the private sector, but simply uses the average income of a handful of top earners in the private sector as the benchmark for the Ministers' salaries. This, I feel, is an attempt to hoodwink the people. I do not think we should accept this kind of rash benchmarking.

If we want to set standards and benchmarking for top civil servants and Ministers, then it should be comparing like with like. We should compare ourselves with countries like Switzerland, etc, according to the land area, the population size, the income of the people, the economic growth and the complexity of politics. We must compare also with the pay given to the Ministers and top civil servants in other countries and then adjust them according to the circumstances of Singapore to fix this kind of benchmark.

The White Paper also mentions that in some countries, a larger part of their ministers' salary is camouflaged by non-monetary rewards such as free housing, cars, expense account, overseas holidays, etc.

The PAP Government has all along been well-known for its effective use of statistics. They should have no difficulty evaluating the worth of these hidden perks in terms of cash value. Why does not the PAP Government do that? Why should you compare chickens with ducks? This is very unconvincing!

Mr Speaker, Sir, here I would like to talk about the basic argument of the White Paper "Competitive Salaries for Competent and Honest Government" and, that is, what the Lianhe Zaobao described as "High pay to keep the worthy and good remuneration to keep the honest".

First of all, when we describe someone as being "a person of virtue" or a worthy person, we refer not only to his ability and wisdom but also his integrity and superior character. So if you suggest using money to keep the worthy and encourage them to look at money for whatever thing they do, then it is an insult to the bona fide worthy person. Even for an ordinary person, money is not the only factor of consideration when you come to work. If our country is to be ruled by the so-called "worthy" people who are money-oriented, then it would be disastrous for the country and the people!

"Good remuneration to keep the honest" is also a problem. In the past, there were some cases of corruption involving our Ministers and top civil servants. Does this imply that their remuneration was not good enough? Now with this huge increase in pay, do you think the Government can assure the people of Singapore that there will be no more corruption? Then, if there are junior civil servants being found to be corrupt, will the Government consider giving them a hefty pay rise because their remuneration is not good enough?

Human desire for material gains is insatiable. Do you really believe that you can keep the talented and the honest just by giving them high salaries? How high must their salaries be to be considered enough? Using the excuse of wanting to keep the talented and the honest to give the Ministers and top civil servants hefty pay rises will certainly leave us completely bewildered!

Of course, I am not asking the Ministers and top civil servants to serve Singapore for free. We all know that in Singapore, apart from the air and the haze we are having now, nothing is for free.

The question is: How much is reasonable? How much is an acceptable benchmark? In my opinion, to fix a benchmark for the Ministers' pay and to convince the people that the PAP benchmark is reasonable, the Government should provide the people with the following information:

Firstly, how many present or resigned Ministers feel that their pay is too low, and how many think that their financial sacrifice is too high and the return is too low?

Secondly, for the Prime Minister and Ministers, apart from their basic pay, what kind of perks do they get, and how much in quantitative terms?

Thirdly, what are the responsibilities and work of the Ministers? How many hours of work do they put in every day, and how many days of vacation do they enjoy a year?

Fourthly, for each and every Minister, if he is to remain in the private sector, or in the public service like the Ministry of Defence until today, to what grade will they be promoted? How much would be their salary?

Fifthly, apart from monetary sacrifice, what sort of other personal sacrifices does the Minister make or has to make?

Sixthly, in the case of Heads of Government and ministers of other countries, what are their basic salaries? What sort of fringe benefits and bonuses do they get in all?

Seventhly, the personal assets of the Ministers should be declared so that the people of Singapore will know whether they have any financial problem, and whether the personal sacrifices they have made due to their involvement in politics are too much. The Secretary-General of the Workers' Party, Mr Jeyaretnam, has already made this suggestion in Parliament but it was not accepted.

Eighthly, for those Ministers who have stepped down, how much do they earn when they go into the private sector?

Mr Speaker, Sir, with the PAP having a commanding majority in this House, of course, this salary benchmarking will be approved. In future, the problem will be treated as solved, once and for all. There will be no need to debate the Ministers' pay. Every year, on 1st July, their salaries will automatically be increased. There is no longer any need to wait for three to five years to get a pay rise. They can have their pay rise in a grand and imposing manner along with the big bosses in the private sector. The boat will rise with the rising tide and their pockets will be full.

If the PAP Government is sincere in wanting to get the feedback from the people, and to convince the people that the salaries of the Ministers are reasonable and appropriate to the situation in our country, then they should not be acting too hastily in wanting to have the White Paper forcibly endorsed in Parliament. They should provide all the information that I mentioned above to allow the people to make some comparative studies. They should also make this an election platform for the next General Election so that the people will have the opportunity of discussing it extensively, and showing through the ballot box whether they support or reject the recommendation of the White Paper.

Therefore, I would like to move the following amendment to the motion:

To delete from "That" to the end and insert -

"While this Houses endorses the principle that Ministers' salaries should be commensurate with their responsibilities and duties, it is of the view that Ministers' salaries should be decided after public debate outside this House and accordingly this question be stood over for the next Parliament after the next General Election."

Mr Speaker: The Member for Hougang has proposed an amendment to the motion:

To delete from "That" to the end and insert -

"While this House endorses the principle that Ministers' salaries should be commensurate with their responsibilities and duties, it is of the view that Ministers' salaries should be decided after public debate outside this House and accordingly this question be stood over for the next Parliament after the next General Election".

Question proposed, "That the words proposed to be deleted, be deleted."

Mr Peter Sung (Buona Vista): Mr Speaker, Sir, I hear with some delight the remarks made by Mr Low. One or two points that he made are quite good. For example, he says that Ministers should not be motivated by money alone and that to take public office requires sacrifice on the part of the people coming forward. I think that is the very basis for people in Singapore to take part in politics. Everyone in the PAP, and several in the Opposition, come forward not because there is money but because they think they have a contribution to make to the governance of Singapore.

Mr Low also said that if this White Paper is passed as it is now, there will be no opportunity to debate Ministerial salaries. I think that is not the truth. Any Member of this House can, at any time, raise any question for discussion and if Mr Low does not know how, maybe the Speaker can guide him.

Mr Low asked how many hours a Minister works. That answer perhaps will vary from Minister to Minister. It is difficult to give a generalisation and, of course, I am not here to answer that question. But the comparison would be how many decisions does a Minister make. Perhaps I can use an example in the private sector which I know a little bit about. I believe I make more decisions in a day than most Ministers do. I believe that my junior managers in my company make even more decisions in a day than I do. The question, of course, is what is the import of those decisions? The decisions that I make for my company affect the future of the company and I do not make too many of them in a particular working day. But my managers who run individual operations make many, many decisions. They affect the efficiency of the operations of the company but they do not impact heavily on the long-term growth, long-term strategy, long-term survival and profitability of my company.

So you cannot compare physical numbers. What matters is the quality of the decisions and the impact of those decisions. In the private sector, it is the impact on the future of the company. In the management of a country, it is the impact of those decisions on the future of not only our children and grandchildren but for many generations to come.

Mr Low says that people's livelihood has not improved over the last few years. That cannot be the truth. That must be a statement made with tongue in cheek. Every statistic that you can produce will attest to the fact that Singaporeans are much better off today than they were five years ago, 10 years ago, or 20 years ago. Maybe Mr Low has a poor memory. He has forgotten the hard days when we got out from the Japanese Occupation, the communal strife of the 1960s and the progress through the recession of the early 1970s, right through to the prosperity of today.

Mr Low says that by giving high salary, we get more money. More money leads to greed and that leads to requests for more money and, therefore, high salary indirectly leads to corruption. He is taking a position which is diametrically opposite of what the Government takes. The Government believes that if you pay people well, there is no need for this temptation to get into a corrupt situation.

Mr Speaker, Sir, private sector employees get salaries which are higher than what the public service pays. The link must be there whether you quantify it or not. Even if Ministers only get paid 10% of the average salary of a manager, even if it is that low, there is a link. The question really is: What is that level? I do not think Mr Low is arguing against the need for a link between public and private sector salaries. He is saying that the salary for Ministers is too high. Is it too high?

High salaries in the public sector will lead and follow high salaries in the private sector. The Government will say private sector salaries have gone up, therefore, public sector salaries will follow. The private sector will say that if you increase the salaries now, next year or some time soon, the private sector will have to increase their salaries to catch up. It has gone into a spiral. We do not know which one really leads which; and it is difficult to prove. But if you were an employee, after the public sector salaries have gone up, I think you can look forward to an adjustment in the salaries also. This will lead to higher salaries, both in the public and private sectors.

Is high salary good or bad for Singaporeans? Well, with high salaries and a habit of saving which Singaporeans tend to have, it must be a good thing because, firstly, high salaries attract people to come here to work. And we have the opportunity to choose the best brains, the most effective people. And when they do come here, they must add to the economy.

High salaries for Singaporeans also mean that when we go abroad for holidays, and many of us do, the Singapore dollar goes a long way. Thirdly, a strong Singapore dollar enables Singaporeans to invest abroad. Many Singaporeans I know have acquired properties overseas as part of their investment portfolio.

So a high salary for Singapore is not necessarily a bad thing. The question really is: how high should it be? The benchmark really depends on whether the level of salary we arrived at for both the private and public sectors is one that the economy can sustain. In the end, the question is whether it affects our competitiveness.

One final point, Mr Speaker, Sir. Mr Low says that the Government collects a lot of money at the expense of the people. Yes, money is collected. But money is now collected only from those who use the facilities. It is a user charge and those who do not use those facilities or do not need to use those facilities do not pay.

In the process, the Government has accumulated very healthy surpluses. This is not something to be condemned. It is something that many governments would dearly like to have. And I think the Government has, time and time again, said that it is prepared to find ways and means to redistribute some of this back to the people, like the sale of Telecom shares and others that will come along, the upgrading of HDB flats for incumbent residents. These redistributions are meant to transfer some of the Government's surpluses back to the people. I think if any Member of the Opposition has any ideas of how to distribute surpluses back to the people in a way that does not lead to dependency and reliance on hand-outs, I am sure the Government will be delighted to hear them.

Sir, I cannot support the amendment put forward by Mr Low.

Mr Low Thia Khiang: Mr Speaker, Sir, can I clarify Mr Sung's point?

Mr Speaker: Order. Can we have the other Members who would like to speak on the amendment?

Mr Loh Meng See: Mr Speaker, Sir, I rise to oppose the amendment moved by Mr Low Thia Khiang.

Mr Low has chosen the dramatic assassination of President Clinton as an example that a foreign leader of government is prepared to risk his life and he is trying to suggest that our leaders do not have that risk. I think this is something that Singaporeans ought to understand. The fact that we have peace, the fact that we do not have such incidents taking place, is justification of the operational readiness and the care to the attention and details taken by our political leaders and the civil service. I think not too long ago, there was the hijack of our Singapore Airlines plane. It is a classic case of Singapore with its leaders planning way ahead and getting ready for any eventuality and the manner in which it was done won the praise and admiration of the people round the world.

Sir, these are things that are not easily seen and we hope that it does not happen. The fact that it does not happen in Singapore speaks a great deal of our Government and the people involved. So I hope that Singaporeans ought to understand and not be misled by Members of the Opposition. Because it is not surprising that the Opposition do not wish to see good and strong government. They do not want to have good and strong Ministers to be in charge of Government, because the better the government is, the greater their odds in the general elections. Let us not be fooled by the drama, by the example that he has quoted.

Sir, the Ministers work 24 hours a day. We all know that. They are on call. They should not be measured by the number of hours that they work. The split-second decision is enough for us. It may have saved us millions of dollars. It may have saved us hundreds of lives. Let us not be foolhardy and be so simplistic that the top political echelon needs to be measured by the number of hours that they work. I think we all know that some consultants charge heavily by the minutes, if not the hours. So it is important for us not to be misled to be so simplistic, to measure whether the Minister works eight hours a day, 10 hours a day or even 15 hours a day. So long as they are on hand, they are ever ready to make the necessary decision at the right time, I think that is all there is. This is what we want. To anticipate the problem when it comes, they are every read to solve it.

Sir, he also mentioned about the perceived privileges of retired Ministers and top civil servants. In fact, it was not very long ago that the members of the public and grassroots leaders felt that we are not taking good care of retired Ministers, particularly those who have given so much to the country. And it will be such a waste that they could not continue to contribute in different fields, and I am very sure that for every office-holder who has been given the opportunity to serve, not so much that they want it, the very organisations that have them will appreciate their services. Let us look at the other side, ie, the kind of contribution that they are making in another area, and why should we lose the services of these people if they could not continue with full-time Ministerial positions.

Sir, I have also mentioned that it is so easy to ask ourselves to compare with other countries. But as I have said earlier in my speech, the Singapore civil service or the Cabinet is a very lean organisation. In fact, we have one of the smallest Cabinets to run the full organs of State. I think we have to look at what it costs to the State rather than the size of the salaries of the Ministers that matters.

Sir, I oppose the amendment to the motion.

Mr Chng Hee Kok (Tampines GRC): Sir, I support the original motion standing in the name of the Prime Minister.

Mr Speaker: Order. We are speaking on the amendment to the motion, Mr Chng. Are you speaking on the substantive motion?

Mr Chng Hee Kok: Sir, I am speaking on the amendment.

Sir, I shall like to ask the House to reject the amendment of by the Opposition Member, Mr Low Thia Khiang.

The issue of Ministerial salaries is not a new subject. This subject was discussed very extensively in 1989 and we went to the people in 1991 and this issue was again discussed a few months ago on the salary revision for 1994. That revision was based on income data that were already two years old. The Government then felt that it was necessary not to implement the full changes as reflected in the income of the private sector at that particular time.

Sir, I think this issue will always be an election issue. My colleague, Mr Peter Sung, has already mentioned that the Opposition Member will be able to raise this issue in this House at ny time by way of Question for Oral Answer or a Motion. There is really no need to postpone a decision on this White Paper.

I am in support of the White Paper. In the last salary revision debate in 1993, I suggested that the Government set up a commission to review Ministers' salaries on a regular basis. At that time, the Government's reply was that it was hard to sell it to the people. The benchmark has been set, and this benchmark is an idea which I support. It is close to what I then asked for in the form of a commission.

The question of Ministerial salaries cannot be measured in terms of hours put in by the Ministers. It is a very difficult topic. I think what the people really have to ask themselves is this, if today you are a citizen in a developed country like France, or a developed country like Great Britain, you will ask yourself: how much money would I pay the Ministers to make sure that they keep out of trouble, to keep out of corruption? In France today, two Ministers have been arrested for corruption. As a French citizen today, how much should you pay the Ministers? And this is happening not just in France and the UK, it happens in Italy as well. What is the price to make sure that our political leaders govern us and take the best interest of the people into account?

In many parts of Asia today, if you are a citizen of that country, you ask yourself whether your children have a fair chance of making it in society. I come from a poor background. I feel that our society has given me the chance, Mr Speaker, to be where I am today, because we believe in the system of meritocracy. If you are a citizen of another Asian country, perhaps you will ask yourself if your children are going to have a chance to makr it in life in 10 years' time? Because I am not connected to any powerful political figure or anyone of influence, is there a chance for my children? I think if you are a citizen of that particular country, you will also ask yourself how much you would pay to have a system like Singapore's whereby anyone can make it to the top as long as one is prepared to work and has the intelligence. If the system is not fair and not equitable, there is no way for an ordinary citizen to make it to the top.

That is why in the private sector, whenever I employ managers, I adopt the philosophy of value for money. If you have a job whereby the person is entrusted with heavy responsibilities or that person is going to be your manager in a different country and whatever decisions he makes will cost you a lot of money one way or the other, you adopt the value for money approach. You say, "Look, if the job can cost me a lot one way or the other, that person can make me a lot of money or can also be costly to the company, you have to adopt the value for money approach." If there is someone you trust and has a good track record, you have to pay a premium. This is what it is all about - value for money. Or would you entrust that particular job to someone who claims he can do the job but comes from a background which you think is dubious?

Therefore, I think this value for money approach must also be adopted when we address this issue of Ministerial salaries. Let us leave aside the personalities, leave aside what is the number of hours the Ministers have to put in the job. I think these are all irrelevant issues. The Prime Minister made it very clear yesterday that to spend $20 million to govern Singapore, produce the result that we have every year since 1985, means we have to address the issue of how much money should we pay to maintain such a system. How much more money should we pay versus what we have to live through in a different country where corruption is rife, there is civil strife and problems in society and the future of our children in doubt? In other words, when a society makes progress we see there is potential for our children. If there is no hope for our children when the society is corrupt and only those who are well-connected can make it to the top, I cannot see why we should support such a system.

So I urge this House and all Singaporeans that when they look at ministerial salaries, they must look at it from the point of view of what are the consequences, and forget about how much we pay an individual Minister. To me, to pay $20 million to keep this Government going is really, I agree with the Prime Minister, very small beer. To make sure that my children, my son, can be where I am today, and hopefully, making further advances is the issue that Singaporeans have to address.

Sir, there is only one point I would like to make on this benchmark and that relates to the inclusion of the share option scheme. Share option varies widely and the benchmark will have been more precise if it had been based on basic pay. Forget about the discount. Why should the Minister's pay be worked on a discount? If that is the Minister's pay, it should be based accordingly. This is an important approach because when the variability is high, in good years there can be a very big jump in salaries. Then the Government will be faced with a problem of whether it is politically correct to adjust accordingly. In other words, can a Minister's salary jump up 40% in a year when private sector salaries go up by only 7%? I think this is an issue which the Government should address. Will it then be a rubber benchmark? When 40% jump is high, there will be a bigger discount. This will not be a politically wise approach to adopt.

This is why I favour a benchmark without the share options, but a benchmark based on salaries. I hope the Government will take this into account. I urge this House to reject the amendment standing in the name of Mr Low Thia Khiang, Sir.

Mr Speaker: Can I remind Members that we are not debating the substantive motion and they should therefore confine their remarks to the amendment proposed by Mr Low.

Mr Chiam See Tong: Mr Speaker, Sir, I rise to support the amendment.

Sir, the NMP has suggested that a referendum be held. A referendum would probably be the best forum to get public opinion on the issues that we are debating, ie, whether to peg the Ministers' salaries to the private sector salaries based on the six professions and whether or not to do away with the need to come back to Parliament to review Ministers' salaries. I think these two are important principles and members of the public should have a say.

Singapore holds Switzerland as a model. As Members know, in Switzerland, they often hold referendum on national issues, and even on local issues. But what does not suit Singapore, even if it holds Switzerland as a model, it would not follow what Switzerland did.

As far as I know, on record, the Prime Minister has never agreed to any referendum called by the Backbenchers. The next best thing, of course, is to have this issue decided at the elections. But there is a problem in calling for this issue to be decided at the elections because, inevitably, the PAP will be returned to power and the Government can give the excuse, "There, you are, we have the mandate." But even if this issue were to be discussed and debated in the elections, I would say that if there is a loss of more seats to the Government or there is a further drop in percentage of votes, it would mean that the public has rejected what the Government proposes in the White Paper. I think that should be the true interpretation of election results. On that basis, I would agree that the recommendations contained in the White Paper be debated at the elections.

There are, in fact, very important issues involved because the practice that has been going for so long in Parliament is going to be taken away. The Member for Buona Vista says that if the Opposition requires it, any time they could bring up a motion or even ask a Question on the Ministers' pay. But that is not the traditional practice of Parliament in regard to the review of Ministers' pay. There is a distinction between bringing up a motion ad hoc at any time to discuss Ministers' pay and the Ministers themselves moving a motion at periodical intervals of time to review Ministers' pay. There is a distinction.

In the case of what the Government is advocating, the Ministers' pay will be pegged to a salary scale, equivalent to a salary scale, and there is automatic increment. I believe one of the Ministers has said that the prospects look good for Singapore for the next 10 years. So the Ministers can be assured of pay rises for the next 10 years, unless the Deputy Prime Minister is saying that the economy is going to have a down slide within the next few years, which I do not think so.

An hon. Member: So?

Mr Chiam See Tong: So do you not agree with me that Ministers' pay will be going up for the next 10 years? As the economy grows, the private sector businesses increase, their CEO will be paid higher. Therefore, when their pay goes up, Ministers' pay will also go up. That is very simple.

An hon. Member: It is wrong.

Mr Chiam See Tong: It is not wrong. But where is the limit? As I have already brought up this point, why do Ministers need so much pay for? As long as they have got a pay for a comfortable living, I do not see why they should be paid an additional $100,000 - $200,000 more. Why do they need so much more money? We are discussing just now on the amendment motion anyway.

Mr Speaker: Mr Chiam, can I ask you to confine yourself to the debate on the amendment?

Mr Chiam See Tong: Yes.

Mr Speaker: It appears to me that you are repeating what you have said yesterday.

Mr Chiam See Tong: There are strong indications that the elections are coming. I believe the Ministers need not wait so long to get their pay increment. I think they can hold on until probably the elections come and we can conveniently have this matter brought up at our hustings.

I just want to bring up one point. The question of Ministers' pay should not arise if the Government has got a good system whereby professionals and qualified people are willing to come forward. The trouble now is that under the present system no good man is willing to come forward. Therefore, more and more pay has to be offered to them as a way to bring them forward. If that is the problem, then the Government should address the key issue: why are good men so unwilling to come forward? Maybe they should have a committee comprising people from the academia to study this problem why good men are unwilling to come forward and then we will solve this problem of having to pay more and more to get people into the Government. That is the crux of the matter. Maybe the Minister should consider forming a committee to study the reasons and problems why good men are not willing to come forward to take part in politics. That is the crux of the matter. So I hope the Minister will take note of this point.

Mr Speaker: I propose to take the vote on the amendment moved by the Member for Hougang.

Question proposed, "That the words proposed to be deleted be deleted."

Mr Low Thia Khiang: Sir, I call for a Division.

Mr Speaker: Mr Low, we have a long debate ahead of us. Do you really insist on a Division?

Mr Low Thia Khiang: I suppose NMP Walter Woon and perhaps maybe Mr Dhanabalan would support my amendment because, in their speeches, they have indicated that ---

Mr Dhanabalan: Mr Speaker, Sir, I was not in the House when the Member spoke. I do not even know what the motion is. How can I support him?

Mr Low Thia Khiang: Assoc. Prof. Walter Woon is also not around.

Mr Speaker: Mr Low, can I suggest that, to save time, your dissent be recorded.

Question proposed, "That the words proposed to be deleted, be deleted."

Amendment accordingly negatived.

Original Question again proposed.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.20 pm. Sitting accordingly suspended at 2.26 pm until 3.20 pm.

Sitting resumed at 3.20 pm