Cabinet pay may soon rise
by Seah Chiang Nee, Littlespeck.com

During May election, hikes in 5-7% GST and cabinet ministers’ pay were widely speculated. Now the 2nd part may also come true.

Nov 26, 2006

By far the highest in the world, Singapore cabinet ministers’ salaries are likely to head for another increase soon.

It follows the recent announcement that civil service salaries would be kept competitive to retain talent, although it did not cover political leaders.

However, Prime Minister Lee Hsien Loong had given a strong hint of it when he said in March that ministers’ pay was lagging behind salary benchmarks.

This was widely anticipated during the May general election when speculation was rife that two unpopular hikes would come as soon as polling ended: A GST (Goods and Services Tax) increase from 5-7% and a rise in cabinet salaries.

The GST hike from 5-7 per cent was recently announced. And observers say the cabinet pay now looks almost certain to materialise.

With the next election five years away, the news is unlikely to cause immediate damage to the ruling People’s Action Party (PAP).

However, public resentment remains high against the huge salaries paid to the Prime Minister, Minister Mentor and Senior Minister as well as other ministers, although it wasn’t enough to bring down the government.

Currently, ministers are paid basic annual salaries (plus performance bonuses) and, at age 55, they are entitled to collect both a salary and full pension.

The President’s basic salary US$1,500,000 (S$2,507,200) while the Prime Minister gets US$1,100,000 (S$1,958,000).

Minister’s Basic salary ranged from US$655,530 to US$819,124 (S$1,166,844 to S$1,458,040) a year.

In comparison, the president of the United States, the most powerful nation in the world, earns US$400,000 and US$50,000 expenses, less than what a junior minister earns in Singapore. In UK, Prime Minister Tony Blair earns US$170,556 annually.

When Mr. Lee Kuan Yew devised the high salary scheme in 1994 – allegedly as a means to combat government corruption – many Singaporeans opposed it including some of Lee’s own colleagues.

Mr. Lim Kim San had “his reservations against throwing money at politicians. His personal preference was to give them challenges and dare them to overcome them.”

Not convinced that high pay packets were necessary to beget good politicians, he said in an interview in 2000: “You don’t throw money at yourself. We have a lot of people, like entrepreneurs, who will accept challenges. What is worrying me is that we are having less people who will take up a challenge’.” (S.T. July 21, 2006)

Lee has defended the high salary as necessary to give Singapore its good governance and keep it Asia’s least corrupt country.

article19’s PS: Credit for the cartoon goes to sei-ji rakugaki of my sketchbook.

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30 Nov 2006: Two news reports by the local media on ministerial salaries. For my own record. And for whoever’s interested……

Ministerial pay “lags behind benchmark”

But decision on whether to relook salaries rests with PM, says SM Goh

by Sue-Ann Chia, Straits Times, 29 Nov 2006

Ministers’ salaries are pegged to that of the private sector, but they still lag behind the benchmark.

It is therefore likely that when civil service pay is reviewed, ministers’ salaries will also be looked at, said Senior Minister Goh Chok Tong yesterday.

Last week, the Government indicated that salaries of civil servants are likely to go up as it must keep its wages competitive to recruit and retain talent in a tightening labour market.

At an interview yesterday wrapping up his visit to Europe, Mr Goh was asked about the likelihood of the pay increase, including for ministers.

He replied: “Since the year 2000, six years have gone by with very good growth rates in some of the years, so it’s time to have a look at the salary of the civil service as a whole, including the salary of the ministers.”

Right now, he said: ministers’ pay packets are at 50 percent of the benchmark, when they should be at two-thirds level.

According to the formula agreed upon for over a decade now, ministerial pay is benchmarked to the salaries of the top earners in six chosen professions. It is set at two-thirds the median income of the top eight earners in each of these six professions – that is, the pay of the individual at the mid-point of the list.

Mr Goh also referred to the subject on Monday night in Slovakia, when he gave a speech to Slovak leaders on how to sustain economic growth.

His message was that civil servants and ministers have to be paid competitive salaries to ensure the best talents are attracted to do these jobs.

Asked yesterday if ministers’ pay packets will be revised upwards to hit the two-thirds peg, he said while it was the “correct pay”, it was not necessary.

“Ideally, we should peg the ministers’ salary to two-thirds as per the formula that was debated in Parliament. But at the same time, we are sensitive that too big an adjustment will cause eyebrows to be raised.”

He added: “But I don’t think that is necessary. Ministers do not mind as long as the pay remains competitive.”

Mr Goh qualified his comments by stressing that the decision was up to the Prime Minister.

“I do not know when he wants to do this, how he wants to do this, how much he wants to do at this stage,” he added.

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Ministers’ pay lags behind salary benchmarks: PM

TODAY, March 2, 2006

DECLINING to reveal exactly how much each cabinet minister is paid, Prime Minister Lee Hsien Loong yesterday shot down the suggestion that ministers who hold multiple portfolios are paid multiple salaries.

In a written response to a question from Non-Constituency MP Steve Chia, Mr Lee said: “They receive only one salary based on the salary grade they are at.”

But the Ministry of Finance — which publishes the manpower expenditure for each ministry’s political appointment holders in the budget book annually — “does not intend to disclose the salaries” of individual cabinet ministers, he added.

Mr Chia, who is also the Secretary-General of the National Solidarity Party, had tabled a question on this, asking for the ministers’ pay for FY2005 to be disclosed in bracket ranges of $250,000. He also asked how this salary compensation compares with the last disclosed figures in 2000.

To this, Mr Lee, who is also the Finance Minister, said: “The framework for setting ministerial salaries and the salary benchmarks were debated openly in Parliament when they were first formulated in 1994 and again in 2000 when they were revised.”

The formula for the ministerial salary benchmark has remained unchanged since the last revision in 2000, he said.

“The benchmark is pegged to two-thirds of the income of the 24th highest earner (median) among a group comprising the top eight earners from six professions (bankers, accountants, engineers, lawyers, MNCs amd local manufacturers),” Mr Lee said, adding that ministers took wage cuts in November 2001 and July 2003.

Although these cuts were restored in July 2004 and January 2005 to pre-Nov 2001 levels, ministerial salaries have “lagged behind” the salary benchmarks compared to the year 2000, he added.