Comment on the Ministerial Salary Review


On Wednesday, the Ministerial Salary Review, headed by Gerard Ee, unveiled its recommendations to the government with a new pay formula for all office holders. Amongst the new measures the committee suggested are: reducing Prime Minister Lee Hsien Loong's annual salary by 28% from its 2010 level to S$2.2 million dollars (US$1.7 million). President Tony Tan, who primarily holds a ceremonial position, may see his annual salary slashed by 51% to S$1.5 million.

Other recommendations include reducing the yearly wage for a junior minister by 31% to S$1.1 million. Most elected lawmakers could take a 3% cut, slashing their yearly wages to S$192,500. Another development of note is the call for the removal of the pension scheme for office holders. To their credit, a few office holders have responded positively to the recommendations within hours of their announcement. PM Lee has indicated that the government intends to accept the recommendations of the committee (link to article).

President Dr Tony Tan has also issued a statement on his facebook (link): “I welcome the recommendations of the Ministerial Salaries Review Committee and have informed the Prime Minister that I will adopt the President’s salary as recommended by the Review Committee backdated to 1 September 2011.”

While Miss Grace Fu, Senior Minister of State for the Ministry for Information, Communications and the Arts, and Ministry for the Environment and Water Resources, said: “When I made the decision to join politics in 2006, pay was not a key factor. Loss of privacy, public scrutiny on myself and my family and loss of personal time were. The disruption to my career was also an important consideration. I had some ground to believe that my family would not suffer a drastic change in the standard of living even though I experienced a drop in my income. So it is with this recent pay cut. If the balance is tilted further in the future, it will make it harder for any one considering political office.” (link)

But are these cuts enough? Considering that in spite of the suggested pay reduction, our junior ministers, let alone our prime minister, are still the highest paid office holders in the world. And if one had to go by Ms Fu’s statement the answer would still be no. Her statement begs the question: How can you claim to represent your people, when you have it in your mind that you deserve a salary that is mostly out of reach for a large majority of the very people you are sworn represent and speak for? Do people enter politics because of the pay? Or do they do it out of a hunger to make a difference in their society and nation, all in the spirit of public service. The government needs to relook at how it attracts and retains people in public office because the current model of pegging ministerial pay to the top percentile of Singaporeans is sending the wrong message to the population. There are also some in the opposition who believe that the recommended cuts are too little and encourage people to enter politics for the wrong incentive (link to article).

However, it has to be said that the acceptance of these recommended cuts are a good first step by the government in showing that it is listening to its electorate. The removal of the pension scheme is a healthy sign that the government is recognizing that it needs to bring itself in line with what the citizens of the country experience regarding their retirement funding. It shows an attempt to understand the pain and fear Singaporeans experience from retirement planning and their CPF balance. It also placates Singaporeans’ sense of fairness; that since they do not have a guaranteed pension waiting for them, then their elected representatives should not have one either. CPF now truly becomes a great equalizer for politician and citizen alike, all of whom now will have to scrimp and save their pennies for their later years, hoping that they meet the minimum sum requirement when the time comes.

But where does the government go from here? Since Singaporean wages have stagnated in recent years, will there be a wage freeze on ministerial salaries until Singaporeans start to see some real income growth in their annual paychecks? A wage freeze, coupled with inflation, will give the politicians a taste of the stagnating pay that Singaporeans have had to endure while watching the buying power of their salaries shrink. The recommendation of ministerial bonuses being linked to raising the real median income growth rate of Singapore citizens seems to point the way forward for the government’s mission. It gives the government the sense of urgency to improve the life of it people and thus truly earn the remuneration that it has always said it deserves.

Editor's note: 

1. Since the publishing of this piece, Ms Grace Fu has clarified her comments on ministerial pay cuts. You can read them here (link). 

2. For those who are interested in continuing a dialog on the issue of ministerial pay, MCYS Minister Chan Chun Sing is having his monthly informal policy discussion on the topic. You can find details of the dialogue session here (link).

Please register before attending as the organizers will need to have a rough headcount to prepare enough seats for everyone present.

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