Goh Chok Tong
Singapore
“This is what your father said during the debate on the Nassim Jade episode: "The proudest thing (for your mother) are her three children − upright, well-behaved and honourable... They are brought up straight, they are likely to stay straight. It is like, as I have said, a code of honour. If you break that code, you have brought shame...”
“They are not just the headaches of the Prime Minister and his team. They are not just the headaches of the PAP. They are also the headaches of the Workers' Party and every Singaporean. On their own, the Prime Minister and his team cannot resolve them. They require us, the Members of Parliament, and the people, to work with them.”
“The national financial education programme, MoneySENSE, continues to work with partners such as the Association of Banks in Singapore (ABS) and the media to educate consumers on the responsible use of credit facilities and the factors consumers should consider before taking on debt. PROPERTY AGENTS' COMMISSION RATES 2.”
“Mdm Halimah Yacob asked the Minister for National Development (a) in 2008, what is the takeup rate for the interim rental housing scheme that is provided to those without homes; (b) what are the reasons given for rejections under this scheme; (c) whether the rental rates were affordable; and (d) how many applicants had rejected the rental…”
“MAS is working with relevant government agencies and stakeholders to study the issue carefully, and to consider the various proposals that have been raised, including the feasibility of introducing a no-fault regime.”
“Mdm Cynthia Phua asked the Minister for National Development (a) if he will provide an update on (i) the use of sustainable alternative materials in the construction industry and (ii) the cost of construction materials in view of increasing inflation rates and rising oil prices; and (b) how will the high material and labour cost impact on…”
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“They will be among the best in their cohort both in the private and public sectors, but will not yet be at the top of their careers Hence we will compare Superscale G officers with top professionals, aged 32, in the same six professions. We will match their salaries not with the topmost earner, but with the 15th highest, in these professions. A good Administrative Officer will easily come among the top 15 of his cohort. No discount will be applied, unlike for the Ministers' benchmark. It is unfair and unrealistic to expect a young person to accept a pay cut to work in the public service. Some people have expressed surprise that the benchmark figures are so high. But the benchmarks are based on Income Tax Department returns and reflect what the private sector earns. IRAS analysed declared earnings of individuals who actually paid income tax based on these figures. In fact, the figures are conservative. Firstly, they are two years behind time. Secondly, many components of income in the private sector are hard to pin down in tax returns, such as benefits in kind, entertainment and travel privileges, even payments abroad. EXEMPTED BUSINESS (Motion) Resolved, That the proceedings on the item of business under discussion be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Wong Kan Seng]. COMPETITIVE SALARIES FOR COMPETENT AND HONEST GOVERNMENT Debate resumed.”
“It is therefore better for us to set benchmarks, based on private sector incomes, as declared in IRAS returns. Then we can adjust salaries annually, in small steps, without re-arguing first principles over and over again. The White Paper proposes the benchmarks. The details are a little complex, but the principles are simple and straightforward. We will compare Ministers' salaries with earnings of top earners in six professions - bankers, lawyers, accountants, engineers, MNC Chief Executive Officers, local manufacturers. We will choose the top four in each profession, and average over 24 people. It is appropriate to compare Ministers with the top of these professions, both because the Ministers have larger and more demanding responsibilities than those top professionals, and because we want Ministers of the calibre who would rise to the top if they were in the private sector. Ministers' salaries at Staff Grade I will then be set at two-thirds the private sector average. In my judgment, the difference of one-third is a fair sacrifice to ask of Ministers. To cater to the range of Ministers' jobs, which are not all the same size, and their different contributions, there will be two higher salary grades for Ministers in addition to the new Staff Grade I. These are the Staff Grade II plus 12%, which is the existing base grade, and Staff Grade IV. Outstanding Administrative Officers with potential to become Permanent Secretaries can expect to reach Superscale G by age 32. Not every Administrative Officer will make it by that age, but the plan, and the hope, is that one-third will.”
“Among our continental neighbours, Spain and France, to say nothing of Italy, have reached a point where the entire state establishment is thought by many to be riddled with corruption.' The White Paper quoted the World Bank Report on The East Asian Miracle: Economic Growth and Public Policy. This Report studied the reasons why countries like Taiwan, South Korea, Singapore, Malaysia and Thailand had such successful economies. It identified three principles for building a reputable civil service: (1) Recruitment and promotion must be merit-based and highly competitive; (2) Total compensation, including pay, perks and prestige, must be competitive with the private sector; and (3) Those who make it to the top should be amply rewarded. This has been precisely Singapore's approach. The World Bank Report noted: `In bureaucracies, as in nearly everything else, you get what you pay for.' `In general, the more favourably the total public sector compensation package compares to compensation in the private sector, the better the quality of the bureaucracy.' It explicitly cited Singapore: `Not surprisingly, Singapore, which is widely perceived to have the region's most competent and upright bureaucracy, pays its bureaucrats best.' In other words, the World Bank sees Singapore as a model, and is encouraging other countries to follow our example. Hitherto, we have revised salaries every four to five years. Because revisions are infrequent, they have to be larger. People fail to realise that the large percentage revisions are to catch up with several years of private sector increases, and are not the typical increase Ministers enjoy every year. Each time, we debate from scratch the appropriate level of Ministers' salaries.”
“The editorial was about the case of the Saudi Arabian jewels which disappeared in Thailand, but it quoted Singapore as an example. I quote: `Singapore, for all its preachiness, makes the point of using the bully pulpit to uphold standards of decent social behaviour. When he was criticised as prime minister for having among the highest salaries of any Head of State in Asia, Lee Kuan Yew could answer, with some justice if less diplomacy, that in fact he was probably the lowest paid leader in Asia.' In other words, the Asian Wall Street Journal reluctantly accepts our judgment that one good way to keep the system honest is to pay everyone, including Ministers, realistic salaries. Asian Intelligence, a fortnightly Report on Asia Business and Politics published by a Hong Kong-based company tracked corruption in Asian countries for its clients, mainly investors, expatriate businessmen and managers. I did not know that corruption was being tracked and reports given to business people. So it plays a part in deciding where one should invest his capital. On a scale of zero to 10, Singapore was rated 0.6 and Hong Kong 1.6 in its April 1994 Report on "Corruption in Asia". A grade of zero is defined as a situation in which corruption does not exist, while a 10 represents a very serious corruption problem that greatly detracts from the business environment. The other countries reported on are: China, Indonesia, Malaysia, Philippines, South Korea, Taiwan and Thailand. As the Report is available only to subscribers, I should not read out the scores. But they ranged from 2.9 to 8.2. Singapore's score is 0.6. Corruption is not an affliction of developing countries alone. John Grigg whom I have quoted earlier also said in the same article: `...”
“How can they find rational solutions if they cannot discuss these things rationally? Salaries cannot be the motivation for becoming a Minister. Becoming a Minister is more than a job. It demands a sense of duty and public purpose, the desire to build a better nation and shape its future. People make many personal sacrifices when they enter politics. Most cannot be helped - the heavy demands on their time, the loss of privacy, the load on their families. But we can and must minimise the financial sacrifice involved in taking up political office. Otherwise, it becomes more difficult to find competent Ministers, and the country will pay dearly for sub-standard Ministers. One standard which is bound to fall when salaries become unrealistic is the integrity of the public service. However efficient the CPIB is, and however ruthlessly we enforce the laws against corruption, it is not possible to maintain a clean government if salaries are too low. A traffic policeman on highway patrol cannot resist the temptation to accept coffee money instead of issuing a speeding ticket if he cannot support himself and his family on his pay alone. It is vital for Singapore to maintain an incorruptible public service, from top to bottom, and not let standards slip. What a traffic policeman can take is "kacang" compared to the harm which a dishonest Permanent Secretary or Minister in charge of hundreds of millions of dollars worth of contracts can do. If the top level is corrupt, no enforcement will keep the lower levels straight. As a Chinese proverb says, shang liang bu zheng, xia liang wai [ ] (If the upper beam is not straight, the lower ones will go aslant.) The Asian Wall Street Journal recently carried an editorial "Gems in the Rough".”
“Otherwise, we will fail in a most important responsibility - to leave Singapore in good hands after we ourselves have left the scene. We need to find on average one new potential Minister a year, ie, four or five in every general election, just to keep up with the normal attrition of passing years. We have not succeeded in doing so in recent years. Unless we find several potential Ministers by the next general election, we will have a serious succession problem by the year 2000. If we cannot even get enough Administrative Officers on competitive wages, how can we find enough Ministers paying non-competitive salaries? Let me state categorically that none of the present Ministers have asked for a salary increase or expected such revisions when they joined my Cabinet. But I have to deal realistically with the urgent problem of finding more new Ministers. Some point out that many developed countries pay their Ministers less than ours. But that does not mean these countries are doing right, or doing well, only that their public opinion and the low standing of their politicians make it impossible for them to grasp the nettle of upping Ministers' salaries. Ministers from developed countries have told us privately how much they envy us, being able to bring the issue of Ministers' salaries out into the open and debate it rationally. They regret that in their political climate, they themselves cannot do that. Because if they do, they will be immediately attacked by their opposition. We must never let ourselves drift into such a grave predicament, where populist hypocrisy prevails and difficult sensitive issues cannot be publicly discussed and solved. It is like the present debate in the US on the question of genes and intelligence brought out in the book called The Bell Curve.”
“The Administrative Service is not so prestigious as the Japanese that able Singaporeans will willingly accept lower pay for the privilege of serving the Government. That is why we have to adopt competitive pay. I have no difficulty in justifying a market-related salary for civil servants. But for Ministers, politically, it is much more difficult. Some critics argue that Ministers should be different. They say politics is a noble calling and that Ministers should naturally make financial sacrifices to serve the people. I agree that Ministers should be different and that there should be some financial sacrifice. But how much sacrifice? That is the nub of the problem. We face the same problem finding able Ministers as finding competent civil servants. We are drawing from the same talent pool, from the same generation of career-minded professionals. The requirements for Ministers are even more stringent than for Permanent Secretaries. A good Minister will make a good Permanent Secretary. But a good Permanent Secretary will not necessarily make a good Minister. Talented Singaporeans are even more reluctant to enter politics than they are to join the civil service. People know how daunting the job is, and how public their failure will be if they do not make the grade. So do their families, who must also be persuaded. Several civil servants I have approached to stand for elections preferred to remain as civil servants. While some are willing, their wives objected. I have previously described to this House how difficult it has been for me to assemble the present Cabinet. The task is getting more difficult, and more urgent. The Cabinet is getting older. The second generation leaders must in turn find and groom third and fourth generation leaders.”
“If the PSC has to recruit people for the Administrative Service after graduation, like other employers, instead of through PSC scholarships, it would get few people. Not that the PSC has not tried, but students who turned down scholarships before going to university are even more unlikely to join the civil service after graduating with good degrees. In the six years since 1989, the PSC has recruited only seven non-scholarship holders for the Administrative Service - just over one a year. Of these, two have already resigned. Pay is not the only reason the Administrative Service is not attracting recruits. Job challenge, career structure and advancement rates also matter. Ambitious young people not only want to be paid what they feel they deserve. They also value prompt, visible symbols of their success. These are important aspects of personnel management practices. They are being urgently addressed, now that we have amended the Constitution to devolve PSC powers, and have put PSD under the Prime Minister's Office. Major changes are under way which will make the public sector approximate the private sector more closely. Just as the civil service will promote and reward as promptly as the private sector, so too it will assess and judge performance as rigorously. But unlike the private sector, the bottom line is not always measured in dollars. The civil service used to be an iron rice-bowl, but this has changed. It will give exceptional rewards only for excellent performance. As a corollary, those who do not measure up, for whatever reason, will have to make way for those who do. The civil service will do this systematically, being fair to individual officers and, at the same time, upholding the integrity of its personnel assessments.”
“We are looking for people who are doing or can do extremely well in the private sector. Such people will simply not come in if it means a large financial sacrifice. The present generation of school leavers enjoy many opportunities to pursue their careers. Returned PSC scholars are the major source of Administrative Officers. 25 years ago, PSC scholarships were much sought after by students completing their Higher School Certificate. For many, the scholarships were the only way to go to university. They came from poor families with parents who could not afford to pay for their university education, much less send them overseas. Of the 15 present Permanent Secretaries, 11 went to university on Government scholarships. Today, students have many alternatives to PSC scholarships. Many parents can easily afford to pay for their children to go to NUS or NTU. They can get other scholarships to go abroad - from banks, from foundations, even from overseas universities. Young people give a civil service career low priority. When offered scholarships, they immediately ask, "How long is the bond?" In 1992, the son of a seamstress declined an Overseas Merit (Teaching) scholarship to Cambridge, even though he had no other scholarship. In 1994, the son of a bus driver declined an Overseas Merit (Open) award to the UK to study engineering, as did the son of an electrician. Instead, they took other scholarships, one from Singapore Technologies Holdings, and the other from MAS. Many scholars do not serve out their bond period, but buy themselves out to join the private sector employers. Their new employers often help to pay off their bonds. In recent years, 30%, nearly one-third, of Administrative Officers left before their bonds expired.”
“We cannot rely on the prestige of public service to make up for lower pay. Singapore is a young society, not an established Japan with set traditions. Singaporeans, especially the young, talented and ambitious, gauge their status by material success and visible rewards. Our system must recognise this reality. Secondly, our civil servants will not wait patiently, advancing gradually by cohort, until one becomes a Permanent Secretary and the rest retire. They need to be advanced on merit, once they prove themselves, with less emphasis on seniority. In the Singapore private sector, professionals reach the peaks of their careers in their 40s. For civil service careers to peak when officers are nearly 60 years old, just before they retire, is untenable. Thirdly, we cannot depend on amakudari to reward civil servants as the Japanese do, although we will often deploy top civil servants to statutory boards and GLCs. Firstly, many major companies in Singapore are MNCs. Secondly, in Singapore's environment, good officers expect rewards while they are serving, not after they retire. Lastly, in Singapore, Ministers set the pace, not civil servants. In many countries, Ministers preside over their Ministries, which are really run by the civil servants. Ministers concentrate on political work, leaving the formulation and implementation of policies to bureaucrats. This is not so in Singapore, where Ministers master the details of their departmental briefs, and take the lead in developing new policies and arguing them in public. Therefore, our methods must ensure not only a good civil service, but also capable Ministers. We are evolving our own model, based on stringent recruitment standards, competitive pay, rigorous testing out and developing of talent, and swift promotions on merit.”
“However, "they (that is the Japanese bureaucrats) are fully aware that they are dealing with important problems, and they take pride in the successful handling of difficult issues." The elite-track bureaucrats advance by cohort. I quote Vogel: `By the time ministry officials reach their thirties, they can identify those in their age group who are most likely to fill the top posts two decades later. At about age fifty, the top several in the age group advance to become chiefs of the most important divisions, and all others who entered the ministry the same year retire. Several years later, consensus begins to jell about who would make the best vice-minister in his age group, and the administrative vice-minister [equivalent to our Permanent Secretary] and the administrative vice-minister chooses his successor, who becomes the most powerful person in the ministry. All remaining peers resign, not because of an official rule but because of custom and because they will receive high positions in private firms or public corporations or will become politicians.' This practice of bureaucrats moving from top ministry posts to senior private sector positions is called "amakudari", which literally means "descent from heaven". You are dropped from heaven to important positions. We can learn much from the Japanese model: the emphasis on recruiting the best candidates, its cohesion and mission, the systematic grooming of promising officers for senior positions, the high status enjoyed by bureaucrats in Japanese society, and the private sector positions for them when they retire from public service. But the Japanese model is not entirely applicable to us. First, we have to stress competitive salaries for the public service much more than the Japanese.”
“The US Congressional Research Service in September 1990 submitted a report to Congress on "The Pay Situation and Federal Judges". It observed that among the major losers in the February 1989 pay increase defeat were the federal judges and that the large gap between their pay and private sector lawyers' earnings was leading to an exodus from the federal bench. I quote from the report: `In March 1989, Chief Justice William Rehnquist called the pay situation faced by the federal judiciary "the most serious threat to the future of the judiciary and its continued operation during my lifetime." .... One US District Court judge recently said: "It was once every lawyer's dream to become a judge. It is not that way now." ' We faced a similar situation earlier. So we systematically raised salaries for Ministers, Judges and other public officers. We have less problem today in getting good private sector lawyers to become Judges and Judicial Commissioners because we raised the salaries of our Judges earlier. Japan offers us a more positive model. The Japanese civil service enjoys high prestige. Entrance is highly competitive. Ezra Vogel described this very well in his book "Japan as Number One". Leading Japanese bureaucrats come from the best universities, like Tokyo University, and rise through the ranks in a carefully prescribed fashion. The top graduates enter the most prestigious ministries (Finance, International Trade and Industry, Foreign Affairs) and agencies (Economic Planning, Land, Environment), provided they pass the ministerial written examination and demonstrate poise, breadth and commitment in interviews. Ezra Vogel describes how the Japanese bureaucrats rise in seniority, but are paid less than their counterparts in private industry.”
“It is absurd that Cabinet ministers, and even the Prime Minister should be paid less than senior civil servants, let alone leading figures in the world outside Westminster and Whitehall.' Will the US model be better for Singapore? The US, like the UK, has problems with low public sector wages. In 1989, the US Congress considered a proposal to increase the pay of top government officials, including Senators and Congressmen. Opponents made it a populist issue, organising radio talk shows, phone-ins and write-in campaigns to intimidate Senators and Congressmen. They were intimidated. As a result, the Senate and Congress were forced to vote against the pay increases, which they had originally hoped to pass without a vote. Later, they tried a second time and got a modified proposal through. As it is politically difficult for Senators and Congressmen to vote for big pay increases for themselves, they make up for low pay by allowing themselves to retain fees for writing books, and in the past for making speeches. But when the American senior officials retire, they make speeches, write books, or set up lobbying and consultancy companies to capitalise on their contacts and their public service. Officials often leave before the term of the Administration runs out, in order to make the most of contacts in high places before their friends leave office and their market value drops. In other words, if they have friends in high places, make use of them. Because political salaries in America cannot be increased, some public sector salaries also get held down. The predictable result is that quality suffers. For example, the US has difficulty finding good federal judges because federal judges are paid a fraction of what good lawyers in private practice earn.”
“The Economist of 24th September in an article "MPs for Hire: Time for Reform" wrote that some MPs peddle influence for money. More than 200 MPs (out of 651) are employed as parliamentary consultants to lobbying companies and other commercial organisations. Their duties include making supportive speeches, asking questions and lobbying government ministers. A single parliamentary consultancy can pay o10,000 or more a year, a third of an MP's salary. And as long as financial links are openly declared, "virtually any payment is permissible". In July, the London Sunday Times tricked two British MPs into agreeing to table questions in Parliament. The MPs are now being investigated by the House of Commons Privileges Committee. In the last few days, our newspapers have reported that the owner of Harrods, Mohammed Al-Fayed, had paid thousands of pounds to a lobbying concern to get two other Conservative MPs to ask questions on his behalf. One of the MPs, named Tim Smith, who had subsequently been appointed a junior minister, immediately resigned his ministership. The other, Neil Hamilton, was a minister in charge of ethics in the Department of Trade and Industry. He first denied any wrongdoing. But, later, when evidence surfaced, Prime Minister John Major sacked him. What is the solution to this problem? John Grigg, a commentator in The Sunday Telegraph (23rd October 1994), offered this: `... Our MPs should be given every encouragement to resist financial temptations of an improper kind, and this must point to their being better paid for the work they are elected to do.' He added: `Ministers, too, should receive salaries that bear some relationship to those that top people in industry, the City and many professions command.”
“The resignations of the 12 Administrative Officers completely cancelled out the annual recruitment into the Administrative Service. Worse, it comes on top of many years of high attrition from the Service. Let me give you another startling statistic. Two-thirds of the Administrative Officers who joined the Service in the late 1970s and early 1980s have resigned. For example, out of the 20 who joined the Service in 1978, only two remain. From the 1980 batch of 14, only one remains. This has severely depleted the Administrative Service ranks of those in the early and late 30s age group. It has caused serious problems in planning succession to the Permanent Secretary posts. We simply do not have enough officers with Permanent Secretary potential to succeed the present Permanent Secretaries. We also do not have enough promising junior officers, two levels down, whom we can groom to become Permanent Secretaries in four to five years' time. That is why the White Paper is necessary. We must move decisively to reinforce the Administrative Service, beef up recruitment and speed up promotions, to pre-empt and head off the problem of weak leadership in future years. Otherwise, the Administrative Service will be further stripped, and the administration will collapse. We need to develop our own model for remunerating Ministers and public officers, by learning from the experience of others. In Britain, the tradition was for people of independent means to enter politics for token salaries. But this system is under strain in Britain itself. Not many present-day British MPs have independent means. As they are paid inadequately, many make up by becoming paid lobbyists for companies.”
“Civil servants' salaries should approximate what their peers of similar qualification, drive and competence can earn in the private sector, in other words, near market rates. This applies to all civil servants - teachers, nurses, technicians, not just top Administrative Officers. It is not fair nor practical to ask them to take a financial sacrifice. I said near market rates, not market rates, because the public sector will follow, not lead the private sector in setting wages. The White Paper is not just about setting benchmarks for Ministers and top civil servants. It is also to establish the principle that all civil servants must be paid as well as their counterparts in the private sector. We will use private sector salaries to benchmark public sector pay. The next decade will pose particularly difficult challenges for the public sector in personnel recruitment. Hitherto, it has to contend only with the booming private sector within Singapore. Now the whole region beckons our able and enterprising. Many public officers, especially those who speak Chinese, are plunging into China, xia hai as the Chinese call it. Despite the major salary revision in January this year, 10 Administrative Officers resigned soon after. Two more left under the Early Release Scheme. Is it surprising? I have led many business delegations overseas. We open doors and establish guan xi for them. They invest, buy, sell and make money. It will require a very altruistic public officer not to be tempted when he sees our businessmen seize the opportunities we help to create. The EDB, TDB and MTI officers can measure themselves against the businessmen and executives and know that what the businessmen do, they can do, and perhaps even better.”
“If you are prepared to live with a mediocre Government, and are happy with the average Ah Tan or Ahmad as your Minister or Permanent Secretary, then the salary benchmark can be pegged to the median income of all Singaporeans, about $1,500 per month. But if you think that your life is safer under competent hands, then the salary benchmark should be pegged to the top few hundred salary earners. These people earn at least $40,000 a month, or $1/2 million a year. You have elected me as your Prime Minister. You have entrusted me with your future. I owe you a duty to assemble the best team for Cabinet and the Administrative Service. I want people who are absolutely honest and will not cheat and lie to you. I want people of exceptional ability who can anticipate and solve problems, and see and create opportunities for you. I want people who are interested beyond their own families' welfare and are prepared to work their guts out for you. I can assemble such a team only if you give me the backing to recruit and retain the best team I can find. I take a pragmatic Singaporean approach - look for a solution that will work. Today's peaceful and prosperous Singapore and abundant opportunities in the region are in sharp contrast with yesterday's of poverty, political and communal strife, struggle for independence and survival, and regional hostility. Lee Kuan Yew and his old guards are legends. If there are younger Lee Kuan Yews, Goh Keng Swees, Eddie Barkers, Rajaratnams, Toh Chin Chyes, or Ong Pang Boons out there, please come forward. Then we can throw the White Paper away. But can we? We still have to decide how to pay our civil servants, in particular, the superscale officers.”
“How did we do it? Without wanting to sound immodest, I would say the short answer is: good Government. This is not to downplay the role of the people themselves - their diligence, their emphasis on education, their high savings habit, their discipline and, above all, their responsiveness to public policies and support for the Government. But people, like an orchestra, can play good symphonies only under the hand of a maestro. The Government comprises two groups of people: political leaders and civil servants. Whether the Government is good or bad, caring or ruthless, honest or corrupt, strong or weak, depends on the quality of the people in Government, in particular, the Ministers and Permanent Secretaries. If you have clever but dishonest people in charge, you will get a corrupt Government which will strip the country bare. If you have honest people but duds as your leaders, they will ruin the country despite their best effort. If the Government is both dishonest and incompetent, you will have three choices: suffer, jump ship or mutiny. Each one of these is not pleasant. But these three situations can be avoided. The key question I want to put before the House is: what kind of Government do you want? That is, what kind of people do you want to have as Ministers and top civil servants? In other words, what sort of people in the Government will best provide you stability, a healthy environment, good-paying jobs and bring you more prosperity? Do you want to have honest Ministers and officials? Do you want to have a fair share of the top talents and high performers in Government? It is only after we answer these questions that we can decide on salary benchmarks for Ministers and civil servants.”
“Mr Speaker, Sir, I beg to move the Motion standing in my name, `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.' In January this year, this House revised the salaries of Ministers and civil servants, to make them competitive with the market. During the debate, Senior Minister suggested that a formula be settled by the House so that future salary revisions could more promptly reflect changes in the market, without the House having to go through old grounds. This Motion is to debate the formula. A competent, honest Government is essential to Singapore's prosperity and success. The Government has to create the conditions for Singaporeans to create wealth - political stability, racial harmony, law and order, good foreign relations, in particular, relations with our neighbours, excellent infrastructure, excellent industrial relations, worker productivity, educated workforce, right economic policies and attractive tax regime, sound economic management, good legal framework, good housing and free-flowing traffic. These are not all the factors that make Singapore competitive and a worthwhile place to work and live in. But they are the key ones. The World Economic Forum in its 1994 Report ranked Singapore second most competitive of the 41 most dynamic economies studied. We lost out to the US only because of one major weakness - the size of our country and our lack of natural resources. It is this competitiveness which enables us to attract investments and tourists, and sell our products and services, to become the 18th richest country in the world in terms of per capita income. We have overtaken New Zealand and are just behind UK and Australia.”
“The expenditure incurred by the Elections Department for the 1991 General Election was $1,100,750 and for the Marine Parade By-Election, $196,580. This included cost of printing ballot papers and election materials, rental of equipment, transportation costs, and allowances paid to election officials (4752 for the 1991 General Election and 710 for the 1992 By-Election). The Elections Department is unable to estimate other imputed costs which would cover the salaries of civil servants and police personnel, and rental for use of schools, community centres, HDB void decks, vehicles, public address system and other equipment. VACANT GOVERNMENT BUILDINGS 2. Dr Kanwaljit Soin asked the Minister for Law (a) how many Government buildings have been vacant for one or more years; (b) why they have not been leased; and (c) what is the market value of these properties.”
“But you can do that only if you have carefully planned for your future. Short-term issues are important. We will deal with them, but not in a way that will create bigger problems for the future. You have a bright future. I would say, exceptionally bright. East Asia is being transformed. In 10 to 15 years time, it will be totally unrecognizable. Singapore is right in the midst of this booming region. Go out and seek your fortunes. You solve nothing by grumbling how high COEs have become or how betrayed you are by the change in medical benefits scheme. Change is a fact of life. He who can adapt to change best is the most likely to succeed in life. This applies to both individuals and nations. Singapore will prosper and so will you, provided you anticipate change and adapt to it. This is the hallmark of the Government - the ability to anticipate problems and deal with them decisively before they suffocate us. We will sharpen this ability, to lay you golden eggs, year after year. [Applause].”
“My worry is: in their impatience to have more, whether they will kill the goose to get at the golden eggs. The goose is the government that we have laboriously built up with the best and the most able from each generation. It is a government which meticulously plans for Singapore's future, and tackles problems long before they are obvious to the people. It is not a government dictated by short-term or self interests. Nor is it one which yields to popular demands which are against the long-term survival of the country. Yes, we are concerned that the ballot box is increasingly being used as a weapon to pressure the Government. I have received reports of some civil servants saying openly, "Just wait till the next election". This is not new to me. I have heard it each time a person is unhappy over a policy or a rule which affects his immediate interest. Each time I hear it, I shake my head. This is a democratic country and Singaporeans are free to choose the kind of government they want. None of my Ministers is interested in his job because of pay or power. We are not interested in hanging on to our jobs. You do us a grave injustice if you think we are. I speak for most, if not all, the Ministers when I say that our happiest moment will be when we can hand over our job to someone suitable. Our mission is clear. It is to keep Singapore going and to enthuse others to join us in our mission. We will keep on going as long as we can make a useful contribution and are wanted. We hope to keep the goose laying golden eggs, by planning for tomorrow so that you can enjoy not just today, but also in the future. Had the old guard leadership not done likewise, we would not be enjoying today's affluence, and the problems of success. We want you to live today to the full.”
“Because Co-Pay Assist will pay for the other half, and therefore they will not be exposed to any additional risk of hospitalisation expenses. Civil servants who want to be completely safe can buy Co-Pay Assist. To check whether they are better off than before, they should compare their salary increases with their new expenses; which are their expected outpatient treatment, plus the premium on NTUC Income's Co-Pay Assist. They will not have any other incremental expenses because Co-Pay Assist will restore their share of hospitalisation expenses to about what it was under the old scheme. PSD has done this comparison for individual officers, for an officer and his wife and for a family of four - the officer, his wife and two children. Again, in almost all cases, the salary increase is much larger than the new expenses, and generally 5 or 10 times larger. Table 10 circulated by Dr Aline Wong yesterday summarises the figures. If you have a chance, look at Table 10 again. I have instructed PSD to go over the detailed figures with the public sector unions. If they find any anomalies, where the salary adjustment is not enough to compensate for the increase in medical costs to the officer, PSD will put them right. No civil servant need be worse off under the new co-pay scheme and the new salary than he was before 1st January 1994. And if he has basic MediShield and buys NTUC Income insurance under Co-Pay Assist, he will not be worse off however unlucky he is with his illnesses, whether renal failure or cancer. I have one nagging worry about Singapore's future. Senior Minister said that Dr Winsemius had observed that Singaporeans wanted more. I agree with Senior Minister that so long as Singaporeans are prepared to work for what they want, there is no harm in their wanting more.”
“Despite this, there may be some MPs and members of the public who have not fully understood the details, and are still worried. I will not go into the details again. The basic logic is simple. Under the old scheme, civil servants enjoyed free outpatient treatment, and co-paid only a small share of their in-patient hospitalisation expenses. Under the new scheme, they must co-pay for their outpatient treatment, and pay about twice as much as before for in-patient hospitalisation expenses. To find out whether they are better off, they must compare their incremental expenses, ie, the expected outpatient expenses (between $30 and $180) plus additional expected hospitalisation expenses (average $200 for Division I, $40 for Division IV), against their salary increase (typically $2,800 for Division I, $1,000 for Division IV). They will find that their pay increase is generally 5 or 10 times larger than their incremental expenses. Civil servants may counter argue that these are only averages, and that if they are particularly unlucky and are stricken with, say, renal failure or cancer, then the extra medical bills would be much more than their pay increases. This is a valid concern. But they need not worry because most of them are already protected by basic MediShield. Nevertheless, to reduce their risk, PSD has worked out with NTUC Income a special supplementary insurance scheme, Co-Pay Assist. This will pay half the hospitalisation expenses of civil servants on the Comprehensive Co-payment Scheme. Since these hospitalisation expenses are twice as large as they used to be, with Co-Pay Assist, civil servants and their dependants will end up paying about the same as before.”
“This was a mistake. It was a quite unnecessary threat to civil servants. I did not know that the Ministry of Finance had done this. When I heard that civil servants were unhappy about this, I immediately wrote to the Minister for Finance. Dr Hu explained that the Ministry wanted to induce serving officers to opt for the revised medical benefits scheme rather than stay on the old scheme, and felt that this would be consistent with the principles enunciated in the Health White Paper. The mistake has been corrected and revised. Circulars have been sent out. I reassure all civil servants who may decide to stay on the old medical benefits scheme that they would be eligible for future salary revisions, and certainly promotions. But the future salary revisions must factor in the value of the medical benefits they will then be receiving as against the lower value of the revised medical benefits scheme. In other words, they will be entitled to future salary revisions, but these revisions may not be the same as for those who have opted for the revised medical benefits scheme. For example, if the difference in the value of medical benefits is calculated to be 0.3% of salary, they will get correspondingly less in their future salary revisions. We have to be fair to the civil servants who have opted for the revised medical benefits scheme. During the debate, many MPs spoke about the concern of civil servants who fear they are worse off under the new medical benefits scheme, despite the concurrent salary revision. BG George Yeo and Dr Aline Wong explained yesterday why this is not so, and why civil servants are much better off opting for Option B, the new Comprehensive Co-payment Scheme, instead of sticking to the old medical benefits and the old salary scales.”
“We are trying to remove this syndrome for the general public and we, in the public sector, must set the example. It is not tenable for us to reform the health care system for the public but not for ourselves. The problem is not that the country cannot afford the health care expenses now but that it will not be able to afford it in future. Our economy is maturing. We will become less competitive. Advances in medical technology are prolonging lives. They are also expensive. We will have more old people in absolute numbers and relatively fewer younger people to support them. These are huge problems - not of the long future of 50 to 60 years, but in the near future of 15 to 20 years. To forestall these problems, we have to tackle them now. We must change the system where once you have paid for a buffet of medical benefits, you can use them as freely as you like. The civil service must lead, not follow in this change. But in changing, we must not make any serving civil servant worse off. They may not be better off, but they must not be worse off. If any civil servant finds himself worse off in this salary and medical benefits revision, he should take it up with his departmental head or Permanent Secretary. His problem will be put right because it is an unintended result. I repeat my assurance. No civil servant should find himself worse off in this revision exercise of salaries and medical benefits. I was extremely annoyed at the mistake made by the Ministry of Finance in implementing the revision of medical benefits. The Public Service Department (PSD) issued two Finance Circulars dated 21st December 1993 and 31st December 1993, stating that civil servants who opt to stay on the old medical benefits scheme would not be entitled to future salary revisions.”
“There was general support for the Address - going regional, and focusing on the problem of an aging population. I note that MPs support raising the CPF Minimum Sum. I hope that they will support the proposal to raise it to $80,000 gradually to prepare Singaporeans for their old age. Unfortunately, the debate has been clouded by the concern and confusion over the change in medical benefits for civil servants. Civil servants are part of the Government. They help to formulate and carry out Government policies. We have one of the best civil services in the world. And we are proud of our civil servants. It is foolhardy for us to upset the civil servants, especially the older ones. There is no reason to, and it is silly for the political leadership to sour up their feelings. The current widespread unhappiness amongst the civil servants is totally unnecessary. It is the result of poor understanding, maybe poor communication, of what the salary and medical benefits revision amounts to. The Government has two objectives in the current exercise to revise salaries and medical benefits. First, to ensure that the remuneration package for civil servants (or compensation as the Americans call it) stay in line with the private sector's. This remuneration package, or total package, has two components - salaries and benefits, like leave and medical benefits. The salaries of civil servants have fallen out of line with their counterparts in the private sector, but the medical benefits are ahead. So instead of just adjusting salaries alone and leaving the medical benefits untouched, we decided to adjust it as a package to secure a second objective. The second objective is to remove the buffet syndrome in the use of medical benefits.”
“We will allow these CPF members to withdraw at least half their cash balances when they reach 55, even if the remainder will be less than the $40,000 needed for the Minimum Sum. This is the present arrangement and there will be no change. But we should reconsider the rule which allows members with less than $11,000 in cash to withdraw the whole amount at 55. I suggest we reduce this floor from $11,000 to $5,000. The Ministry of Labour is studying the details of this scheme, and should be ready to announce its findings within a few months. Now, let me deal briefly with the other priority for this year - spreading the second wing. There is no need for me to elaborate. Senior Minister has already spoken on this. Our emphasis will be on implementation, finding suitable projects and partners, and helping countries in the region grow as we benefit from their growth. Other than the ASEAN countries, we should concentrate on China, Vietnam, India, and Myanmar. Pakistan and Cambodia are also possibilities. I am visiting India later this month and Vietnam in early March. I also plan to visit Myanmar this year. I have been invited to visit Pakistan and Cambodia and will do so at a convenient time. We are setting aside a portion of our reserves to invest in the region. If the region grows strongly, as we, others and the World Bank expect it to, we will have a steady stream of income from our external economy to supplement our domestic earnings. This will be especially useful, given our large number of elderly in the 21st Century. Had we not built up these reserves, we would not be sought after. And we would not be able to benefit from the growth in the region, and generate additional income to look after the old. I followed the debate on the President's Address closely.”
“In parallel, we can phase in the cash requirement, increasing it by $4,000 or $5,000 per year, until it reaches $40,000, that is, half the target Minimum Sum of $80,000. After the Minimum Sum reaches $80,000, it should be adjusted for inflation, as we have been doing. As the Minimum Sum increases each year, we will proportionately raise the annuity amount which can be withdrawn monthly. The monthly withdrawal will be based on the total Minimum Sum, including the property, as at present, rather than the cash amount. However, the monthly withdrawal will have to depend on the amount which the member has set aside in his own Minimum Sum. It will, therefore, vary from member to member, unlike at present where all members make the same monthly withdrawal, even though they put aside varying amounts in their Minimum Sums. Most CPF members will have no difficulty in meeting the revised Minimum Sum requirement. Most young CPF members will probably have bought a house by the time they retire, and will have accumulated more than $40,000 in cash in their Special Accounts. By raising the Minimum Sum gradually, we minimise the impact on those who are about to withdraw their CPF savings. To help CPF members build up the cash amount needed for the Minimum Sum, the CPF will pay a higher interest rate on the Special Account and the Minimum Sum (Retirement Account) than on the rest of the members' balances. This is justified as these balances are held for the long term, and cannot be taken out for investing in properties or shares. The Ministry of Finance will work out what this higher interest rate should be. Low income members may not have $40,000 in cash to put aside when they reach 55.”
“He should depend on his own savings, supplemented by allowances from his children. With nearly 600,000 elderly, and only four workers to one retiree in the future, the country will not have the resources to fund welfare programmes for the elderly. It is wishful thinking that we can afford to do so. We cannot expect Singapore to grow at more than 6% per year in the 21st Century. As our economy matures and the population ages, we are more likely to grow at 3% to 5% per year, like the developed countries. We have to prepare now to make sure that the old of tomorrow can look after themselves. Otherwise, they may find themselves left high and dry if the economy cannot generate sufficient growth to look after their welfare. I propose that we double the Minimum Sum in real terms. This will not be done overnight, but slowly over ten years. With adjustment for inflation, the final number should be about $80,000. Presently, we allow the entire Minimum Sum to be in the form of a pledged property. MPs have pointed out that property is an illiquid asset, and we do not want to force people to sell their properties to live on the proceeds. Some MPs have suggested that we introduce reverse mortgages on HDB properties. MND will study this. Meanwhile, I propose a more direct approach: we will require part of the Minimum Sum to be in cash. I propose that of the $80,000, up to half can be in a property, and the remainder must be in cash, so long as the person has the cash in his CPF account when he reaches 55. Most will. We should make this adjustment gradually, over a decade. This way, we will not force large unanticipated changes on those who are presently nearing 55. For example, we can raise the Minimum Sum by $5,000 per year, starting next year, until it reaches $80,000.”
“Actually we should be talking about "life expectancy" at age 55 because at that age you can expect to live longer than the age given for "life expectancy at birth". And the figure is not the same. In 1992, while average life expectancy at birth was 76, average life expectancy at age 55 was 79; in other words, add three years to your retirement period. Can a person who stops work at 55 live on his CPF savings for another 22 years, which is about two-thirds his working life? Just think what will happen if his savings run out. Our CPF withdrawal age at 55 was fixed in 1955, nearly 40 years ago. We have raised the retirement age but not the CPF withdrawal age. Ideally, we should follow the example of the developed countries and link the CPF withdrawal age to retirement age. Then, we will all have to work beyond 55. This was what the Howe Yoon Chong Report recommended. But instead, we decided in 1987 to solve the problem by a different route: the Minimum Sum Scheme. This requires CPF members to set aside a Minimum Sum at age 55. Currently, the sum is set at $34,600. Members can withdraw it as an annuity starting from the age of 60. We do not need to raise this withdrawal age for the Minimum Sum for the time being. But we will link it with the retirement age. As people live even longer, and we raise the retirement age above 60, the withdrawal age for the Minimum Sum will have to go up in step. However, we should start to increase the Minimum Sum now. There are two compelling reasons. Firstly, the present Minimum Sum was set for a subsistence living, and is not sufficient to meet the expected standard of living for future retirees. Secondly, no retiree should become an economic burden for future generation.”
“We will gradually raise it to 65, and eventually to 67 as life expectancy increases. Our CPF withdrawal age at 55 is totally out of step with today's reality and life expectancy. Several European countries have recently raised their pension withdrawal age, that is, the age from which pension benefits begin. Japan has upped it from 60 to 65. Germany and Italy did likewise, that is, from 60 to 65. France has increased from 37.5 to 40 the number of years people must work to collect their full retirement benefits. Sweden is also planning to increase its retirement age. Look at Chart 6 (Cols. 347 - 348) which compares the pension withdrawal age with male life expectancy, again for selected countries. For Singapore, the pension withdrawal age is equivalent to our CPF withdrawal age. On average, for the developed countries, pensions are payable for only 8 years. It is 8 years for UK, 7 for USA, 8 for France, 8 for Germany, and 11 for Japan. That is, after retirement, they will expect to live for 7 to 11 years longer. Our CPF, which is equivalent to the pension scheme, is expected to last us 19 years, and the Minimum Sum 14 years. I am amazed that some workers are courageous enough to start a second family in Batam or Haadyai, according to Mr Lim Boon Heng, with their retirement savings. I think the Malays would call them Pak Sanggup - someone who imagines he is more capable than he really is and accepts a position of responsibility he cannot fully discharge. I came across this phrase in yesterday's Bahasa Melayu in the Straits Times. Chart 6 - MALE LIFE EXPECTANCY AND PENSION WITHDRAWAL AGE (Cols. 347 - 348) "Life expectancy" data actually refer to "life expectancy at birth". So bear this in mind. It is not life expectancy at the age of 55.”
“If you look at Singapore, under the column "1991", the median age is 30, that means, half the population will be aged over 30 and the other half below 30. Chart 5 - MEDIAN AGE OF POPULATION (Cols. 345 - 346) By 2025, the median age would have increased by 12 years to 42. This is an indication of the ageing in the society and the youthfulness of a society as compared to the other countries. By 2025, we would have joined the rank of the older, mature societies like UK and France. In contrast, our ASEAN neighbours will still be relatively young. Malaysia, in particular, will have a young population with a median age of 28. These have implications for us. A young population has an advantage in international economic competition. Young workers acquire skills easily. When the market situation changes, they can be retrained more quickly in new technology and production processes. For example, they can adjust themselves to new changes in computers, software, and so on. I worry that in 30 years' time, our economy may lose some of its drive, vigour and competitiveness. If companies and young workers then, that is, in the future, will have to be taxed heavily to support the large number of elderly Singaporeans, the 600,000 elderly Singaporeans, that will be disastrous. Companies will lose their cost-competitiveness. Workers will have less take-home pay. We must never burden companies and the workers with punishing income tax. That is why we have reformed our tax system and introduced the GST. If ever we need more revenue, which I do not anticipate for quite sometime, we will raise GST instead, because GST is a tax on consumption, not on production, like income tax. In anticipation of the rapid ageing of our population, last year we raised the retirement age to 60.”
“Birth rates also fell in the developed countries, but they did so more gradually, over many years. At this rate of ageing, we will have 592,000 people aged 65 and above in 30 years' time (or nearly 600,000), as compared with 164,000 today. To give you a sense of the size of the number - it will require 10 Marine Parades to house these 600,000 elderly Singaporeans and two new Singapore General Hospitals (SGHs) to meet their acute hospitalisation needs. Our ratio of working-age persons to retirees will drop sharply. This is measured by the aged dependency ratio, that is, the ratio of population between 15 and retirement age to the population above retirement age. Please look at Chart 3 (Cols. 343 - 344) which shows the aged dependency ratio of Singapore. The current aged dependency ratio is 11, if you look at the column where the retirement age is fixed at 65 years. By 2025, it will go down to 4. If we do not shift our retirement age upwards, and let it remain at 60, then by 2025 the ratio will be 2. The working population in 2025 will have to be extremely productive to look after themselves, their children, and their parents. Chart 3 - AGED DEPENDENCY RATIO OF SINGAPORE (Cols. 343 - 344) Chart 4 (Cols. 345 - 346) compares our aged dependency ratios with selected countries - developed and ASEAN countries. Our ratio of 4 for the year 2025 is much lower than our ASEAN neighbours; 7 for Thailand; 8 for Malaysia; and 9 for Indonesia. Chart 4 - AGED DEPENDENCY RATIO (Cols. 345 - 346) Chart 5 (Cols. 345 - 346) shows another way of measuring the youthfulness of a society. It shows the median age of Singapore as compared with selected countries - Malaysia, Indonesia, Thailand, USA, UK, France, Germany and Japan. The median age divides the population into two equal halves.”
“OF YEARS REQUIRED FOR THE AGED TO GROW FROM 10% OF POPULATION TO 20%, AGED DEPENDENCY RATIO OF SINGAPORE, AGED DEPENDENCY RATIO, MEDIAN AGE OF POPULATION, MALE LIFE EXPECTANCY AND PENSION WITHDRAWAL AGE (Cols. 339 - 348) Chart 1 (Cols. 339 - 340) shows the percentage increase of the population aged 65 and older for selected countries - United Kingdom, USA, France, Germany, Japan and Singapore. Chart 1 - POPULATION 65 AND OLDER PER CENT INCREASE FROM 1991 TO 2025 (Cols. 339 - 340) For United Kingdom, the population aged 65 and older will increase by about 30% between 1991 and 2025. For Singapore, our rate of increase will be about 250%, eight times the rate in UK. It is also faster than the rate of increase for the other four countries. Now look at Chart 2 (Cols. 341 - 342). Chart 2 shows the number of years required for the aged to grow from 10% of the population to 20%. It will take UK 85 years for their proportion of aged to grow from 10% of the population to 20%. But it will take us only 17 years. For Japan, it will take 25 years, and for the other countries more than 50 years before they become an elderly society. The ageing of our population is therefore not a long term problem. It has already descended upon us and we have to address it now, not leave it to 10 or 15 years later. Chart 2 - NO. OF YEARS REQUIRED FOR THE AGED TO GROW FROM 10% OF POPULATION TO 20% (Cols. 341 - 342) Why is our rate of population ageing much faster than the developed countries? We had a baby boom after the Second World War, like many other countries. Then our birth rates came down sharply in the 1960s and 1970s, as living standards went up, as a result of rapid industrialisation, economic development and urbanisation. We also had a very effective family planning programme.”
“Then Ministers' pay can vary with market conditions without our having to re-argue the need and rationale for a revision every few years. It will go up when the economy does well and it will go down when the economy does not. In Singapore, Ministers have powers. But their powers are exercised for the public good, never for personal good. To give you an example - Ministers create the conditions for companies and individuals to do well and for their shares in their companies to boom. But they do not enjoy the benefits. They do not trade in shares. They may apply for shares through IPOs (initial public offers), but they neither trade in the market nor speculate. Dr Richard Hu sold off all his shares upon his appointment as Finance Minister. Nobody told him to. He just did, to avoid any conflict of interest, and any misperception that he might benefit from inside information. Other Ministers invest their savings through investment managers in the form of blind trust. Like Mahathir, I don't play shares, not for week-day expenses nor for week-end entertainment. I have not bought any share from the market since becoming an MP, except Singapore Telecom Group 'A' shares. How many bull markets have we missed! My two other priorities this year are: to address the problems resulting from an ageing population; and to extend the spread of our second wing. Ageing of population is a universal phenomenon. Many societies are ageing, but we are ageing the fastest. I have prepared some charts (Cols. 339 - 348) to illustrate this problem. They are with you. They will explain why I am focusing this year on the problem. charts - POPULATION 65 AND OLDER PER CENT INCREASE FROM 1991 TO 2025, NO.”
“When he goes back, others like Othman Haron Eusofe will be taken into Government, on a rotational basis. The aim is not to appoint every labour MP into Government office, nor to let them hold Ministerial title when they return to NTUC. Otherwise, NTUC will be saturated with office-holders. It is to broaden the experience of the NTUC MPs who can contribute in Government, and benchmark their public status. To recruit and retain the services of MPs in the labour movement, NTUC must pay them their market worth, just as we are doing for civil servants and Ministers. Otherwise, NTUC will not have the leadership to advance workers' interests along constructive line. At the same time, NTUC must also find ways to accord due recognition to other union leaders who rise from the rank and file, or who join as professionals. Together with the labour MPs, they are responsible for making the industrial relations system work. The Senior Minister has re-opened the subject on Ministers' salaries. Personally, I find it distasteful to discuss how much Ministers are worth and how they should be paid. After my speech on the salary revision for civil servants and Ministers on 3rd December 1993, the Senior Minister rang me up. He apologised for not being in Parliament to show support. He had misjudged the time when I would speak. He added that he would choose an appropriate occasion to show that he endorsed the policy to pay Ministers near market wages. He showed me the draft of his speech. I agreed with his suggestion of finding a formula to fix and revise Ministers' pay. I do not know at this stage what the best formula will be. But there is merit in having the formula published, openly debated in Parliament, and adopted for the long term.”
“Without them, we would not have a union movement which seeks first to cooperate instead of rushing to confront, which pursues productivity instead of merely demanding more pay, which re-trains workers instead of rejecting the introduction of machines, computers and modernisation. They form a bridge between Government which looks long term, and workers whose concerns are short term. Their task is not a simple one: they have to persuade workers that policies are correct, and at the same time persuade Government to modify policies to suit the rank and file. Of necessity, much of their work is not made public, as such public airing can unnecessarily poison the industrial relations atmosphere. Because the public is unaware of the bridging work they do, they remain largely unappreciated. Like the Government, NTUC is facing difficulties in recruiting good men into their leadership ranks. Hence, the need for the Government to parachute in MPs from time to time. These MPs need to be paid a fair market wage and be rewarded for their contribution. Certainly, they will have to be paid what they would earn outside NTUC. I intend to recognise the importance of the labour MPs by bringing some of them into Government from time to time. This is different from the practice of seconding Ministers to run the NTUC at the unions' request. It is for those who have decided to make a career in NTUC and who in our view can also contribute as a Parliamentary Secretary, Minister of State or Minister. When circumstances permit, we will also ask those whom we intend for political office to serve first in NTUC, so as to sharpen their feel for the ground. I started this scheme with Lim Boon Heng, followed by Goh Chee Wee. Chee Wee will return to NTUC after a while.”
“His posting to the Ministry of Foreign Affairs will give him a new dimension. Teo Chee Hean is a cross of George Yeo and Lim Hng Kiang. He has impressed with his chairmanship of the Committee To Promote Overseas Enterprise. Come July, he will help Lee Boon Yang in the Ministry of Defence. After he has proven himself, which I think he will, I hope to appoint him to succeed Lee Boon Yang as Minister for Defence. Abdullah Tarmugi has moved quickly, quietly and confidently to fill the vacuum in the Malay leadership. He is reaching out to the Malay grassroots leaders, and unifying the different factions to work for the common good of the Malay community. But he has to show that he can both run a Ministry as well as lead the Malays before he is made a Minister. I believe Lim Hng Kiang, Teo Chee Hean and Abdullah Tarmugi have the potential to be Ministers. Barring unforeseen circumstances, like ill health, the present Cabinet members will realise Vision 1999 for Singapore and, see it into the 21st Century. But we will still need to find three or four new Ministers before the next General Elections. We need to lighten the load of those Ministers with dual Ministries as well as to prepare a new crop who can take over from the older Ministers in the 21st Century. This is a national priority, not just a task for the PAP. For if we fail to find and induct the best to serve in politics, Singapore leadership will lack the strength and experience to face the challenges in the new Century. There is another group of leaders whose political contribution should be better recognised. Their contribution to Singaporeans' prosperity has been largely unnoticed and grossly unappreciated. They are the union leaders and MPs in the NTUC.”
“I have one big regret for 1993 - the loss of many good men from Cabinet: the late Dr Tay Eng Soon, Ahmad Mattar, Ong Teng Cheong, Dhanabalan. And later this year, Yeo Ning Hong and Ker Sin Tze. Their departure from Cabinet, along with Tony Tan's, has left a gaping hole in Cabinet. My priority is to build up the younger Ministers quickly. They will be tested and stretched, groomed and developed. They will take on more responsibilities and in many instances, double Ministries. Singaporeans who think that Ministers are overpaid should bear this in mind. We do not appoint Ministers just to fill vacancies. We appoint them only when we think that they can carry their own weight, and pay, as Ministers. And when they take on two Ministries, they do not get double pay. The savings go to the Government. We all know George Yeo's qualities. He is an ideas man, a conceptualizer, an effective communicator. He looks at problems from a fresh perspective, and has built up MITA from scratch into an influential Ministry. But MITA's line responsibilities do not include many painful policies, like COEs or medical cost increases. Now that George Yeo is in charge of the Health Ministry, in addition to MITA, he will have to show that he can implement unpopular policies, persuade Singaporeans to accept bitter medicine, and be tough enough to absorb and counter public criticism. He has already started, with yesterday's Ministerial Statement on MediShield Plus and Co-Pay Assist. George knows why I sent him to the Health Ministry. He accepted the challenge. Lim Hng Kiang in a way is a contrast of George Yeo. He is a very effective nuts and bolts man, quick, impatient and decisive. He does not share George's keen interest in history and abstract ideas.”
“Mr Speaker, Sir, I look back on 1993 with some satisfaction. Our economy grew strongly. It was the best performance since 1988. We also put in place policies which will sustain our robust growth - going regional, tax reform through the GST, autonomous schools, health care reform, and raising retirement age to 60. We introduced practical schemes to increase Singaporeans' assets - upgrading HDB flats, selling HDB shops to create a new class of commercial property owners, the CPF Share Top-up Scheme, selling Singapore Telecom Group "A" shares to make Singapore a nation of share-owners. The upgrading of HDB flats and sale of HDB shops are one-off programmes: the recipients benefit only once, although the programmes will be stretched out over a number of years. In contrast, the CPF Share Top-up Scheme and the sale of shares of privatised statutory boards will benefit Singaporeans each time the economy does exceptionally well, and each time we privatise another statutory board. We will periodically top-up Singaporeans' CPF accounts, provided we enjoy good growth and exceptional budget surplus. This will achieve two objectives: one, increase the assets of Singaporeans, and two, bring home the message that our individual prosperity is linked to the collective prosperity of the nation. If all of us work together to increase the wealth of the country, a portion of it will be redistributed to the people in the form of CPF Top-up or shares sold at a discount. This way, Singaporeans will understand, in a most vivid way, the linkage between their personal contributions and the country's collective performance - because better national performance brings dividends for each and everyone of us.”
“Help me get the best team to look after your and the country's interests. [Applause].”
“And I know many successful lawyers in the 50s, people whom I know personally, who earn much more than a Minister or the Prime Minister. The robust regional developments are making my job of assembling a good team in Cabinet very difficult. It is much more difficult as compared with Senior Minister's when he was Prime Minister. Firstly, in the 1950s, the political leaders were seized with the passion for independence then prevailing in the region. Having secured independence, they had to build a nation. They had a clear historic mission. They did not have to be persuaded to come forward. Secondly, in the 1950s and 1960s, and even the 1970s, the best jobs were in the public sector. It offered good pay and job security. In the 1990s, the private sector has overtaken the public sector. It now offers more challenges and much more attractive opportunities for able men, particularly with the economic boom in the region. Thirdly, in the 1950s and 1960s, Senior Minister's catchment of political talent extended beyond Singapore to Malaya. Mine is restricted to Singapore. It is not possible to pay a Minister as much as he can command in the private sector. But the pay must be such that a younger generation of Singaporeans will consider it worthwhile to join the Government in lieu of the comforts and privacy of their present jobs and lifestyle. If we do not pay Ministers adequately, we will get inadequate Ministers. If you pay peanuts, you will get monkeys for your Ministers. The people will suffer, not the monkeys. I have been in the Government long enough to know that if the Cabinet is inadequate, and worse, dishonest, disaster for the country must follow. Do not compromise your own future by playing up the politics of envy.”
“Ours is a situation where potential Ministers have to be persuaded to join us. Yes, altruism is important and a person must not join the Government just because the pay is attractive. There must be that extra in him. But even if a person is driven by idealism, there still has to be basic parities to attract him or her into politics and high office. Precisely because we have peace and prosperity, and enjoyed robust economic growth, the opportunity cost of taking up public office has gone up. It is not just a loss of personal privacy in public office. Vast opportunities await the able and talented in the private sector, and not just in Singapore. Opportunities abound in the region. China alone offers tremendous opportunities for the enterprising, especially if they are also proficient in the Chinese language. There is also Vietnam. India will also offer vast opportunities. Not all who venture into China or into Vietnam, or later into India, will make it rich. But many will. Already, many have given up settled jobs for the excitement and rewards of venturing overseas. Take, for example, Ong Chit Chung. He was an academic. He resigned as Parliamentary Secretary to head a company which has interest in expanding its activities outside Singapore. Ow Chin Hock too has just resigned from the University after serving nearly 22 years. As the PRC Chinese would say, he has "plunged into the ocean" (xia hai ). Another example is Tan Cheng Bock. Besides being a general practitioner and an MP, he is also Chairman of a company with interests in investment and manufacturing outside Singapore. I hope Tan Cheng Bock will not mind if I reveal that he earns more than a Minister.”
“Is it any wonder why Switzerland, despite its lack of natural resources and having a small and multi-lingual and multi-religious population, enjoy one of the highest standards of living in the world? My biggest responsibility is to ensure that Singapore continues to have a proficient Government. It is not an easy responsibility to discharge. Despite our publicly-announced policy to pay market wages for Ministers, comparable to what top civil servants and executives earn, few people want to take on the job. Instead of getting more people to join the Cabinet, I am suffering a loss. Dhanabalan and Yeo Ning Hong are not leaving for reasons of pay. They have never complained about their salaries and are not seeking better-paid jobs in the private sector. But their vacancies will be more difficult to fill if we require potential Ministers to take a substantial pay-cut from their present jobs. I have approached several people with ministerial potential to stand for election as MPs. They have declined. They did not want to change their life-style and lose their privacy. This loss of privacy is not factored into the salary. I do not think you can put a value to it. If a person values his privacy, you can pay him much more, but I do not think he would come in. It will become even more difficult to persuade able Singaporeans to shoulder the burden of state and become public figures if Ministers' salaries are lower than what they can earn in the private sector. I have heard comments that Ministers should be paid basic wages, or modest wages, as service in such high offices should be driven by the desire to work for the country and not for pecuniary interest. I find this argument idealistic and lacking touch with reality.”
“The employees, for example, can get alternative employment easily. But if the Prime Minister and his Cabinet mismanage the country, and bankrupt the economy, it is not easy for Singaporeans to seek alternative employment, or to migrate. Their suffering will be long and intolerable. I once asked Dr Tony Tan what was the difference between his present job as Chairman of OCBC and his former appointment as Minister for Education. He put it succinctly. In OCBC, he makes more decisions everyday than when he was in the Ministry of Education. But each decision is a relatively small one, affecting only a small number of people. In the Ministry, most decisions are big ones, affecting a large number of people and for life. Study why some countries do well and others do not. You will see that the major explanation for the difference in performance is the quality of Government - its competence, integrity and dedication to the people. It is invidious for me to make this point by citing examples. But you can cast your mind near and far and draw your own conclusions. Singaporeans have seen their standard of living rise year after year since 1959. That is not a random outcome, a fluke. It is because of honest and effective leadership. If I am unable to recruit honest and able men and women into Cabinet, I cannot maintain the same high degree of honesty and competence. The standard of Government will go down, and with it, the standard of living of Singaporeans. The proficiency of Government is increasingly recognised as a major factor determining a country's economic health. BERI (Business Environment Risk Intelligence) studied 47 countries and ranked Singapore second, just after Switzerland.”
“So long as we can deliver a better life for them, and clearly explain the rationale for the salary revision, I believe they will support our fundamental premise that a Minister must be paid a salary close to what his private sector counterpart holding equivalent responsibility is earning. But we must clearly show the nexus between their own future and having honest and competent people in Government. No group of Singaporeans is as crucial to Singapore's continued peace and prosperity as the team that makes up the Cabinet. It is this team which manages Singapore and determines the quality of your life. We need 17 members to make up this team - Prime Minister, Deputy Prime Minister, Senior Minister and Ministers. I have only 14. Mr Dhanabalan will be leaving at the end of this year. Dr Yeo Ning Hong has served me notice to leave in six months' time. That will reduce my team to 12. We must have the best people for Cabinet. Their policies and actions will determine whether Singaporeans continue to enjoy better jobs, better housing and better quality of life, or whether the country goes downhill and renders Singaporeans jobless and poor. We are looking for people who, if they are not in politics, would eventually be Permanent Secretaries, Chairmen or Chief Executive Officers of large companies. The Minister's job is more onerous and will have greater impact on Singaporeans' livelihood and life-style than even the CEO of the largest company in Singapore. He should not earn much less than CEOs of top companies. If a CEO and his management team make bad business decisions, and cause the company to go bankrupt, only the shareholders, employees and creditors will suffer. But if the economy is booming, their suffering will be short-lived.”
“Mr Speaker, Sir, I have left the Deputy Prime Minister, BG Lee, to carry the burden of explaining the reasons for the salary revision because he has been working on this in the last few months. From the response of the Members of Parliament, I see that there is unanimous support for the revision for civil servants. I believe I am right in my assessment. It is the adjustment for the Ministers that attracts some concern. I want to confine myself therefore to the philosophy behind the salary adjustment for Ministers and other political office-holders. Some of my colleagues are a little squeamish about the political cost of increasing salaries for Ministers. They fear that the Opposition will exploit it and work up voter dissatisfaction against the Government. I do not deny that this salary revision will cost us some votes because the Opposition will play up the politics of envy. And indeed they have, at every election, by mischievously and wrongly comparing how much a Minister earns with what an average worker earns a month. Today, Mr Ling has said that he does not begrudge the pay of the Ministers. Mr Chiam and Mr Low seem to be supportive. Of course, they made some valid points about Ministers coming in to serve not just for money alone. I hope they will remember what they have said today and at future elections do not play up this politics of envy just for the votes. There is some political cost. But I have to weigh this against the greater cost to the country and Singaporeans if we fail to have a Cabinet of integrity and exceptional ability. I have weighed the costs to the PAP, and decided that whatever they are, the larger interests of the nation must prevail. I have faith in the commonsense and judgment of the majority of Singaporeans.”
“Voting for the President is by the whole country, not by electoral divisions. The result is dependent on votes cast for each candidate in all divisions. The percentage of votes cast in each electoral division for each of the candidates is not relevant. TWO-ROOM AND BIGGER FLATS PROGRAMME FOR AGED PARENTS AND THEIR MARRIED CHILDREN 2. Dr Kanwaljit Soin asked the Minister for National Development when will the Housing and Development Board embark on its programme of building 2-room flats on the lower floors and bigger flats on the upper floors to allow aged parents and their married children to lead separate lives while maintaining close ties.”
“Often she was in pain while performing her public duty. Yet, she was always there, smiling and warm, keeping up with the President as he moved around greeting guests. Like the President, the First Lady has no affectations. She has a genuine love for people. She has contributed to the prestige and respectability of the Presidency. Mr Speaker, Sir, Mr Wee Kim Wee is a happy and contented man whether he is President Wee or plain Wee Kim Wee. I am sure all Members will join me in thanking President Wee Kim Wee for his outstanding public service as President and in extending to him and Mrs Wee our best wishes for their future. [Applause].”