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 stood for elections between 1959 and before 1968 and retired by 1984, after which date we increased salaries significantly, ie, elections between 1959 and before 1968, those difficult crucial years, and retired before 1984 when we increased salaries. They fought the communists and the communalists, stayed on course despite personal risks to their lives and limbs. Without the courage and loyalty of the Assemblymen and MPs from 1959 to 1965, the Legislative Assembly would have gone to the Barisan Sosialis and Singapore's history would have taken a disastrous turn. Or Singapore would have been intimidated and made to submit after the communal riots of 1964 and 1965. Their salaries were deliberately held down by the Government then because those were difficult times. Salary revisions were only made after the British military forces had been withdrawn without causing massive unemployment. I am now studying how to give tangible recognition to their past contributions. Only the MPs and the Ministers of this period who have made a difference to the fate of Singapore merit this special recognition. In other words, not all MPs or Ministers will get this tangible recognition. I shall consult the Senior Minister on the eligibility list. Next, we should not forget the second group, the public sector pensioners who retired before March 1972 when salaries were revised and pensionable public officers brought under the CPF Act. While their contributions to Singapore were not equal to that of the PAP MPs and Ministers, nevertheless, they worked for the Government during those turbulent times to tackle difficult problems. I have asked a working group to settle a fair and workable formula for this group of public sector pensioners.”
“From the pool of lawyers who earn more than $600,000 a year or the pool of lawyers who earn less, just to save cost for the Judiciary? If I want to appoint a Law Minister sometime in the future and I want to look for a young lawyer today who can be nurtured and groomed to become a future Law Minister or Home Affairs Minister or Foreign Minister, from which pool of young men would I look? From the pool of young men who have potential to earn more than $600,000 a year or from the pool of young men who will never be able to earn that much? Whilst we are talking about the formula, I have also been thinking for some time now how to accord tangible recognition to those other Singaporeans who laid the foundation for Singapore's progress and prosperity. They are the ones who planted the trees. The fruits which we enjoy today are because of the trees which they planted, the careful nurturing which they gave. They are not enjoying the fruits which we are all enjoying today. Certainly, not to the same extent which the younger generation is enjoying today. Singaporeans are caught up in a wave of the future, this wave of prosperity. But I think it is good that we sit back and, from time to time, reflect on who made all this possible. To more than just reflect, to recognise their contributions in some tangible ways. There are three groups of older Singaporeans whose past contributions I would like to recognise, and I would recommend that the House recognise their past contributions in tangible ways. First, the special group of MPs and Ministers whose stout-heartedness and great personal sacrifice made a difference to Singapore's history.”
“The Ministers must take responsibility if things had gone wrong. I, as Prime Minister, would also have to take responsibility. I was Prime Minister at that time only for about four months. Jayakumar, Yeo Ning Hong, Lee Hsien Loong, Lim Siong Guan, these are the kind of people we want for Cabinet and for the Administrative Service. Lim Siong Guan was made Staff Grade I officer this year. Do not tell me that he is not worth over half a million dollars a year? Philip Yeo, not involved in all this, but also another Staff Grade I officer, is Chairman of EDB and Chairman of Sembawang. He is now tasked by the Government to use Sembawang as a vehicle to extend our investments into the region. He built up the defence industry, the Singapore Technologies Group. If Philip Yeo were not committed to the public service, he could easily go into the private sector and command a salary of over $1 million. No problem. There will be many people bidding for his services. So we come back to the basic question: what kind of Government do you want? That is, what kind of people do we target at to recruit for Government? Having targeted them, how do we pay them? Those who look at the salaries and say, "Wah, so high" are looking at the wrong end of the telescope. We look at actual people, what they can do and earn. They are able people we want. Of course, we look at other attributes - character, leadership qualities, compassion, dedication, feel for people. We look at actual people and we try to design terms of pay to match the kind of talent we want for Cabinet and the civil service. If I may illustrate this with the example of the Judiciary and the lawyers. If I want to appoint a Judge, from which pool would I search among the lawyers for a Judge?”
“The EG reported to the Minister for Home Affairs, at that time, Prof. Jayakumar. When the hijack took place, both Jayakumar and Yeo Ning Hong rushed to the airport. They were there together with the civil servants for the entire episode. Jayakumar kept me briefed on developments. The Ministers had to approve every key decision which had to be taken at each stage of the crisis. Uppermost in their minds was the safety of the passengers. At 6.43 am, Lim Siong Guan and the Chief of Defence Force, General Ng Jui Ping, reported to Jayakumar and Yeo Ning Hong that the situation was becoming critical. The hijackers were getting violent. They had doused the cockpit and the various instruments with alcohol. They threatened to kill people in five minutes if their demands were not met, and the threat was taken seriously because earlier on they had pushed out of the cabin two members of the aircraft crew. Lim Siong Guan asked for immediate approval to storm the plane. The two Ministers had to decide there and then. There was no time to ring me up for the final decision. Jayakumar asked General Ng: "Are your men ready?" "Yes, Sir," replied General Ng. Then the Minister said, "Proceed." By 7.00 am it was all over. A few minutes after that, Jayakumar rang me up. He said, "PM, it is all over. All the hijackers had been killed. No passenger was injured." Jayakumar and Yeo Ning Hong took the right decision, and the civil servants also came to the right assessment and gave the right recommendation to them. But they were also lucky. Supposing they were unlucky and the passengers were injured or killed. They would have been accountable, not the civil servants. Not Lim Siong Guan, Peter Chan, Ng Jui Ping or the Special Forces that were there.”
“They want to know what is the rate of the GST, what pain it will cause them, how they would be protected from the GST. Again, we got the Ministers involved. The Ministers who worked on the GST along with the civil servants were Deputy Prime Minister, Minister for Finance, Dr Richard Hu, the Minister for Trade and Industry, at that time Mr Dhanabalan, and later Minister of State for Finance, RAdm Teo Chee Hean. The draft was circulated many times to the Ministers for inputs. By the time the White Paper was published, it had been redrafted more than 30 times, and it was not just technical redrafting. The whole approach had been totally changed. Other countries have sacrificed their Finance Ministers when they introduced GST. I did not have to sacrifice Dr Richard Hu. Let me give you the last example which gives a very different facet of the work of civil servants and the Ministers, and in a way the strength required of civil servants and Ministers when they have to manage a crisis. This is the SQ 117 hijacking. SQ 117 was hijacked on 26th March 1991. The Executive Group (EG) comprising key Permanent Secretaries convened at Changi Airport to deal with the crisis. The EG comprised three key Permanent Secretaries - the PS (Home Affairs) as Chairman, PS (Defence) and PS (Foreign Affairs). The acting Chairman was Mr Lim Siong Guan because the Chairman, BG Tan Chin Tiong, was away overseas. The other key player was Mr Peter Chan, then PS (Foreign Affairs). The EG was formed a few years earlier when I was in the Defence Ministry. I suggested that we should have such a group to deal with contingencies. I knew the capabilities of the EG. I knew who were in the Executive Group and I knew the resources that they could muster to deal with emergencies, and crisis of this nature.”
“The Government collected $4.2 billion from the ST listing, double the amount of revenue originally estimated by the lead managers. In other words, it saved the Government $2 billion. The lead managers earned over $33 million from the Singapore Telecom listing, nearly $9 million in professional fees and nearly $25 million in commissions. And I would say that the lead managers fully deserved their earnings. I think the Ministerial committee should be given $12.5 million commission on the extra $2 billion which they collected for the Government. That is the price which they would have got if they were outside doing a job for Singapore Telecom. But they got nothing, not the civil servants, not the Ministers, not a cent. It is part of their normal job. The $33 million earned by the lead managers is sufficient to pay all the political office holders for two years. In one exercise, they earned that much. That is enough to pay all of us for two years. The $2 billion collected for the Government is sufficient to pay all of us at the revised salaries for 100 years. The third example where Ministers make a difference to the work of the civil service is the GST. When the GST was introduced earlier this year, I regard it as the greatest non-event. And this is as a result of careful preparations before-hand to design the tax, to prepare the legislation, to work out a comprehensive offset package and to carry out extensive public education. The MOF, Inland Revenue Authority, MITA, MTI and MAS were all involved. The first draft of the GST White Paper in May 1992 was put up by the civil servants. But the draft dealt with the technicalities of the GST, and these were not answers which the public wanted to hear or see in the White Paper.”
“The decision to corporatise and then float Singapore Telecom was initiated by the Ministers. We also decided to distribute Singapore Telecom shares widely amongst citizens to make Singapore a share-owning society. That is a political decision. That is not a civil service decision, to make Singapore a share-owning society. We wanted to do this on a scale never achieved anywhere else in the world. The civil servants got down to work. They appointed lead managers to work out at what price to sell Singapore Telecom shares and what discount to give to Singaporeans. They almost finalised the structure with the lead managers. Then one day, DPM came to see me. He said that Dr Yeo Ning Hong had told him that the ST price which would be quoted on the market at IPO was too low, and we would be giving so much money away. DPM felt the same way. Also, he felt that there were other issues to be resolved - policy issues, not technical issues, which could not be done by the civil servants. For example, how much discount for shareholders and the quantum of loyalty bonus to prevent stagging. I asked him what was the solution. He suggested we form a Ministerial committee to deal with policies. I agreed. DPM chaired the committee. Then we had the Minister for Finance, Dr Richard Hu; Minister for Communications, Mr Mah Bow Tan; and Dr Yeo Ning Hong, the previous Minister for Communications and Information on the committee. The committee was assisted by the working level committee chaired by Mr Lim Siong Guan who was then Chairman of the CPF and also Permanent Secretary (Defence). It comprised civil servants from all key Ministries and agencies. Everything went smoothly. The civil servants did a wonderful job, attending to details and many real, practical problems.”
“They spell out the details and they implement them. From time to time, they do initiate policies. But by the very nature of the civil service, they do not make bold moves. They cannot make bold moves. Those must be done by the Ministers. I will give you four examples. The first example is the HDB upgrading programme. This is a project costing $20 billion, lasting 20 years which will be 80% subsidised by the Government. No civil servant will have the boldness to propose such a programme. It is not a criticism of the civil servants. It is not within their portfolio, within their mission. This is a job for the Ministers. The upgrading decision did not follow from any staff paper by the civil servants. Ministers visit housing estates. They look at the old housing estates and they know that younger people are moving out from the older housing estates to newer ones at Bishan, Tampines, Pasir Ris. So they could see that the older housing estates were being hollowed out as these young people move and the old ones remain. So if we do not do something to the older housing estates, before long you are going to get very, very old people living in very old housing estates, and slums may emerge in the older housing estates. Mr Dhanabalan first directed this upgrading exercise. He went to Europe together with Mr Lim Hng Kiang who at that time was in the HDB. Dr Richard Hu took over and now Mr Lim Hng Kiang is in charge of the programme. The decisions which they got to take include what kind of a package for the upgrading, how much residents should pay and the basis for choosing neighbourhoods. This is an example of a programme where Ministers make a difference to people's lives. The second example - Singapore Telecom IPO.”
“Ministers in Singapore have tremendous prestige. MPs in Singapore have tremendous prestige. But how did the prestige come about? Did it come about just because you are an MP or because you are a Minister? In the UK, I have read a survey where they asked the people to rank the prestige of the various professions, doctors, lawyers and so on. Ministers, MPs, are ranked at the bottom, except for journalists. In the US, I have read similar reports and politicians are ranked right at the bottom, except for used car salesmen. I did not know that lawyers are also ranked somewhere below the MP. The prestige is not automatic. It is earned. It is earned because we have over the last 40 years run an efficient, clean Government. And that is the kind of prestige which I want to be able to maintain for the next generation and, hopefully, my successor will continue to maintain it - clean, competent Government. Then there will be prestige for all of the MPs in this House. And I think even the Opposition MPs acquire some prestige as a result of the PAP's system. Some people argue that most of the work is done by civil servants and hence you do not require good Ministers. They are wrong. The Senior Minister has given you illustrations from his generation of leaders to show that that was wrong. I will give you some illustrations to show that it is also wrong to come to that perception for today's Ministers. A competent government requires both good civil servants and good Ministers. In fact, it requires that the Ministers be better than the civil servants. Civil servants, I would say almost by definition, do not innovate. They are not entrepreneurs. They are there to manage and maintain the system. They help to formulate policies. They work out the pros and cons.”
“Then there is a meaningful choice for the people. You cannot just go to election or referendum on one single issue such as this. Since we are talking about going to the people, I think just for our own satisfaction, we should perhaps go through the SDP's shadow Cabinet list. Who would you have as your PM? I am not sure whether it would be Ling How Doong or Chee Soon Juan. Finance Minister, I think the Party treasurer is the most qualified to be the Finance Minister of Singapore, Cheo Chai Chen. Mr Chiam, you can put a question mark because I am not sure where he would be. That is the basis for the people to decide. In fact, I think for the next election, perhaps I should start a convention, name the core list of your leaders. I will name five of my key people, SDP names five of the key people, Workers' Party names five. Put the salaries against these people, we go for election. Then the people can decide. If they want to have a cheap government, by all means, it is their choice. They can choose a cheap government, or lowest tender, lowest cost, go ahead. Or would the people begin to think that that is a silly way of employing a government or a CEO for a company? The way to do so is what can the CEO do for me? Then he will start asking, not how much Ministers are paid, but what Ministers can do for them. And this is what I want to get Singaporeans to understand. What can the Government do for you? There were a few other, I would say, silly remarks. I will dispose of them very quickly. Ministers have power, therefore, take less pay. I think this is a childish argument. Yes, we have power, but this is the power to do good, not a power to benefit ourselves. Privileges, shaking hands with Kings, Queens and Presidents. Come off it! Prestige, yes.”
“The Prime Minister: Thank you for your legal clarification on those points. But generally, on salaries, where there is no big conflict of interest, it is the non-executive directors who decide on the salaries for the directors. The directors who decide on the salary of the CEO may not be directors on the board. Yes, Mr Chiam and of course Mr Low Thia Khiang say to let the people decide. Then the Straits Times also jumped in, banner headlines, "Let the people decide". In the final analysis, it is the people who decide but they cannot decide on this issue in isolation. You got to give them alternatives. You got to give them the package. The issue to be put to the voters, because they will decide in the end, is what does it cost the country to have the PAP Government, and what are the benefits which they can get out of having the PAP Government. I am going to invite the SDP and also the Workers' Party to tell me what it will cost Singapore if you have a SDP government or a Workers' Party government. How much would you pay your prime minister? How much would you pay your Finance Minister? It can be lower than the $22 million which should be in place after a few years' time. Would it be a $10 million, $5 million SDP government, or would it be $20 million? Then we give the people three choices, and that should be the issue which should be fought in the election, which I will call in due course. State the price of your government. State your vision. What would you do for them? "Dare to Change" for the SDP? For Workers' Party, I do not know what their slogan will be. Perhaps it is "Time to Go". Then we decide. Dare to change, change to what? Our programmes, HDB upgrading, share-owning society, plus a host of other programmes which we will announce for the people.”
“We must have faith that we can assemble a team both for Government, the political component, as well as for the civil service, to be able to give the people a better life. I can expect the Opposition MPs to play this political game: put it to the people to decide. But I am surprised that Walter Woon should also fall into the same trap when he suggested that the matter should be put to a referendum. I thought he made good points generally, but this one took my breath away. I have got to confess quite openly. But as the Senior Minister countered on Tuesday, is it within the realm of experience of the people to decide on such an issue? Walter Woon is wrong to say that shareholders decide on directors' pay. They do not. It is the non-executive directors who will decide on the pay of the executive directors. The non-executive directors normally get an allowance and even if they give themselves a big allowance, it is decided not by all shareholders, but by a few major shareholders whom they actually represent. They could be the proxies for the shareholders. Assoc. Prof. Walter Woon (Nominated Member): May I seek a point of clarification, with your permission, Mr Speaker? I did not want to get into technicalities, Mr Prime Minister. But if the board of directors is interested in any contract or any transaction, the law says that it goes back to the shareholders. This has been established for a long time. You should read perhaps the case of Erlanger v New Sombrero Phosphate Company 1878 decision of the House of Lords, Re Halt Garage (1964) Ltd 1980 decision of Justice Oliver, now Lord Oliver, Guinness Pte Ltd v Saunders 1990 decision of the House of Lords. I would be happy to supply you full citations at any time, Mr Prime Minister.”
“Because there is a range of variable bonuses which you cannot calculate in advance - performance bonus, bonus based on the economic growth of the country. This can be left out because we cannot actually fix it until the year is over. But I decided that this would be hypocritical. This is not how I want to run Singapore. And my colleagues also agreed with me that we should be honest with the people. If this is what costs the country, this is what you will see. So the figures which you see are the cost to the country. We have no additional perks. Yes, there is a tax-free car allowance. But it is recomputed with tax imputed, and that figure also appears in the published figures. It is a part of the salary. No housing allowance, no holiday allowance, and we pay tax. As Tan Cheng Bock remarked, many people thought we do not pay tax. We pay tax on every cent of our salary. We pay our own PUB bills. We pay our own telephone bills. I changed the system when we moved into time-based system. I thought it is not fair if we pay for the telephones of MPs or Ministers now that we have moved to a time-based system, because we do not know who will be using the telephone at home. So I changed the system. We pay for our own telephone bills and we pay for our own hospitalisation bills. If DPM is so unlucky as to suffer a relapse of his lymphoma, he has to pay for his own treatment. Are we wise in being so open with the people? Can the voters ever understand? Will the Opposition ever stop playing at politics? I do not think the voters can ever understand, if you look at issues in isolation. But you must have faith in them. At the end of the day, it is how their lives are affected by the Government. That will determine how they will vote. And that faith we must have.”
“I assessed what they should get on the basis of their performance for that year, also their workload for that year because a Minister can be very able, can be very good, but for that year, if the workload is much less because of circumstances, then the performance bonus could be less than the usual. The average for all the 33 office-holders is 0.92 month, not even one month. I could have given all the PAP Ministers and office-holders a minimum of one month, and many two months. But we did not do that. But, maybe in retrospect, perhaps I should have taken two months' performance bonus. One, people do not know it and I pay a political price because the figure for the PM's salary includes the two months' bonus. It is published. Two, it might be better to take the one month's bonus and then give it to charity, or give it to the FAS for the soccer training award for the young footballers. Why save money for the Government? Some people have advised me against being too straightforward with the people. They think I am too open, too candid, too honest. So they said in this exercise of benchmarking salaries to the private sector and, even before this, when we had the debate on Ministers' salaries in December last year, that I should not go for the total wage figure, what you call the clean wage system. Hide it under perks and privileges, give a car to each Minister, allowance for entertainment, maybe allowance for travel, gardener's allowance, travel allowance, all kinds of allowances which would not appear in the book's published figures, which you do not see. If you do that, I think we can massage the figure down to about 60% of what it appears in the White Paper.”
“But we will make sure that we will have a team of people who can keep out such people from Parliament. So we have developed our own way of screening candidates, testing them, asking them to stand for elections and also our own way of paying the Ministers. The tone of a country is set by the Government, in particular the Prime Minister. This is not a spendthrift Government. I am entitled to an official residence. I do not live in it. When I became Prime Minister in November 1990, I took over Mr Lee Kuan Yew's official car. It was about five years old. I did not buy a new car. I am still using that same car today. It is a 1984 model, purchased in 1985. In the private sector, in the past, I do not know about now, I think a new car would be bought for the CEO every five years. Now, perhaps, with the higher cost of cars, it could be seven years. In the public sector service, the Instruction Manual says that a car can be changed after the seventh year. But there is no need for me to change my car so long as it is still working. If I may give you another illustration. Normally, I would not want to talk about what we do. But I have to give these examples to show that we are not here to vote for more pay for ourselves. So I have to be a little immodest over here when I go through what I have decided for myself and for my colleagues. On performance bonus, Parliament agreed that the Prime Minister's bonus should be fixed at two months prior to this year's revision. I never took two months' performance bonus. I took one month. I gave the Senior Minister one month's performance bonus. Surely, he is worth more than one month's performance bonus. We have 33 political office-holders. I have total discretion to decide on how much they get, from zero to a maximum of two months.”
“Up to now, most of the people whom we have identified came mainly from the public sector, but I am getting a little more worried because in the last few years it was not just from the public sector, it was actually from the SAF - DPM Lee Hsien Loong, BG George Yeo, Lim Hng Kiang, Teo Chee Hean. Our base is getting to be too narrow. No matter how bright and able these officers are, I do not want to end up with a Cabinet comprising people with no other experience than the SAF. I think it is bad for the Cabinet and it is bad for the country. We need people from outside the SAF, in the public sector and, more importantly, we are hoping to recruit two or three from the private sector, and that is where the problem begins. Who are they, where are they, and would they come if we find them? If we do not use this present method to systematically look for people outside, just looking at the people outside now who want to come in from the Opposition camp, who do we end up with in Parliament? I think from the SDP you may have Chee Soon Juan. Would you give him $63,000 per month to be the Prime Minister of Singapore because that is the assessed sum for a decent lifestyle for the Prime Minister? I am amazed at SDP MPs' reaction. If anybody calls Matthias Yao or Vasoo a cheat or a liar, and Matthias Yao and Vasoo do not sue, they will be sacked from the PAP right away. If anyone outside makes an allegation against a Minister which is defamatory and the Minister does not sue, that Minister will be investigated. I am surprised that SDP MPs are prepared to work for somebody who has been called a cheat and a liar and who has not sued. So the system which we want to work is to keep out such people from Parliament. Yes, they will contest at elections against us.”
“If we change the rules, it will be a very different Parliament, different character altogether. I use this to illustrate that we have never blindly followed what others do. We set out to create our own model. For Ministers, most other countries just leave it to chance. They go on the basis that people must have that passion for politics. They therefore will join a political party, prove themselves and end up as candidates for election. If they win, then maybe the better ones, or those with more political influence, will be appointed Ministers. I do not think we can leave that to chance. I use my personal example and I can quote the other Ministers as example. If we just leave it to the conventional method, I think you will be having very few of us here in Parliament. Would you get good people to come in had the PAP not scoured the whole of Singapore to look for people like ourselves in Parliament? I think there will always be people who want to be in Parliament. But what kind of people will come in? Maybe once in a while we get exceptional people - good character, good ability, really good for the country, even under today's circumstances. But you need more than one or two people to run the Government. So we systematically look for people who can contribute and I have from time to time told you of the tremendous difficulty I am facing. I have invited Members of Parliament to let me know if they have good contacts. Dr Kanwaljit Soin knows my problem and she has in fact sent me one or two names, and I urge the others to do so, so that we can follow up on the names.”
“We are trying to evolve our own model to draw top people into Government and that is what, in the final analysis, the White Paper is about, evolving our own model for governing Singapore, for recruiting, retaining and remunerating top people. If I may give an example of elections. We do not just copy what is done in the West. In US, in Japan, Thailand, Taiwan, you have got to have money to take part in politics. If you do not have, you borrow and, hopefully, you repay your loans later on. The US is now having their Congressional elections. It is reported that up to now the rivals have spent US$88 million on campaigning and the spending is still increasing. In California, Republican Michael Huffington spent a record US$25 million of his own money up to 20th October to unseat his Democratic Senator rival. He is from Texas. He is an oilman. His father's wealth helped to finance him and he has his own wealth to do so. Senator Edward Kennedy used his suburban residence as collateral to borrow US$2 million and lent it to himself for the campaign, which means that after the campaign is over, the campaign fund must reimburse him for the loan which he has given. The point I am making here is that if you follow their system where money is required to fight elections, you will end up only with very wealthy people in Parliament. People with independent means, people with huge resources, to fight elections, to win, to come to Parliament, in their case, Congress. We have never followed this style. We have made our elections cheap in the sense that you are not required to be rich, and in fact you cannot spend more than a dollar per voter. So if you look around, we have a very different kind of Members of Parliament.”
“I think it is extremely risky to compare the pay of Singapore leaders with the pay of leaders in developing countries. I know that the Senior Minister was paid maybe less than one-hundredth of the pay of President Marcos, but I do not think Marcos was just 100 times richer than Lee Kuan Yew. I think he was much wealthier. The second objection to this comparison is that Prime Ministers and Ministers are not tradable. We are not like commodities which can be exchanged on the international market. John Major, however willing he is to become the Prime Minister of Singapore, cannot become the Prime Minister of Singapore. A third reason, as Dr Lee Tsao Yuan has pointed out, is that corporate managers, and I would include engineers, perhaps even architects, in Singapore, are paid much more than those in some developed countries because of the scarcity of such people in the developing countries around here. So Singapore corporate managers are in demand. Their pay is much higher than a corporate manager's pay in UK or France or even in the US. So a truer comparison is with what others of similar aptitude and competence in the country are paid. This is what benchmarking is all about. You look at what others in equivalent professions are paid in Singapore and then you decide on the pay of the civil servants and the Ministers. Lastly, I do not agree that the practice of the other countries is the best way to produce good government. If their salaries are low, that does not mean that we have to follow their low salaries, because you can see the impact of their low salaries for leaders and public sector employees, on the quality of their government. I do not think they got the best people for their own public sector.”
“Thank you. The rationale behind the make-up pay is actually 100% benchmarking. When I get somebody from the private sector to be in the Government, I use 100% benchmarking. So for Ministers, I am looking at what a person of equivalent talent and with an equivalent job size can earn outside. So we are now talking about this revision which is actually in a way giving him make-up pay. If it makes it easier for her, I can use a certain make-up pay, instead of using the formula to revise. But the principle is the same. You are actually looking at what the private sector pay is and you make up for the loss of earnings for the Ministers. Yet another method suggested by Opposition MPs is to look at the earnings of Ministers elsewhere. Mr Ling suggested that we should look at what ASEAN Ministers and Prime Ministers or Presidents are paid. Mr Chiam circulated a table of what leaders are paid in some developed countries. So I take it that the argument is that we should look at the pay of other Ministers elsewhere and then pay our Ministers accordingly. I think such comparison is not meaningful on four counts. The first reason is that the full costs of Government to the country are not captured. You cannot use pay alone, you have to go for the full costs of Government - pay, plus perks, plus the number of political appointees that you may have for the Government. For example, President Clinton has his Air Force One and his Camp David. I understand that Air Force One costs something like US$18 million a year to operate. Of course, it is not just a simple passenger aircraft. It is a communications centre. It has got all kinds of sophisticated devices in it, but it costs US$18 million a year just to operate Air Force One.”
“Then there was a suggestion that we should use make-up pay for Ministers. I find a contradiction in Dr Kanwaljit Soin's argument. She argued that we should appoint Ministers, identify the right people outside, appoint them to be Ministers and pay them make-up pay in order that these Ministers will not suffer any financial loss. If she is prepared to pay nominated Ministers their private sector salaries without discount, why does she grudge elected Ministers the same salary if the elected Minister is just as good as the nominated Minister? I do not think they are doing the same job. I think an elected Minister does a bigger job because he has a constituency to look after and he has to be able to mobilise people. But technically, professionally, the elected Minister must be as good as the nominated Minister.”
“Mr Chiam asked whether I would take it. If I can be sure that Mr Chiam will be around after the next elections, for the PM I am inclined to take it. Because then Mr Chiam cannot go around and say that what the PM earns in one day, a worker will take 30 days to earn. To the layman, $700,000 is a lot of money. Right? So if Mr Chiam goes around saying in future elections that the PM and the Ministers earn that much, I will say that Mr Chiam recommends it.”
“Never mind. Let us say that we multiply it by 12, I think it is not too far off from the current salaries of the Ministers. For the PM, multiply by 12, it is about two-thirds of what the PM is getting.”
“I checked with Mr Chiam outside and he told me that I could add in variable bonuses. I checked with him outside because I was busy taking down notes over here. Mr Chiam See Tong: Income tax.”
“I think Mr Chiam has suggested that we go on a decent lifestyle basis. I think he was supported, maybe innocently, by Assoc. Prof. Walter Woon. But a decent lifestyle basis is subjective. What is a decent lifestyle? Do you provide for children's education in universities abroad? How much do you have to put aside for old age? And why should the Minister have such a decent lifestyle when the bulk of the population live in 4-5 room flats and some in 2-3 room flats? Why can the people not have the same lifestyle as the Ministers? So this subjective element will be difficult to use in deciding on how much a Minister should be paid. And I know of no company in Singapore - perhaps there are such state companies in Communist countries - which pays its employees on a decent lifestyle basis. In Communist countries where they pay employees in accordance with need, maybe they pay in accordance with decent lifestyle. But that decent lifestyle is at a very low level. For market economies, it is payment in accordance with the worth of a person, how much does he contribute, what is his ability, what is his performance. But even on a subjective basis, Mr Chiam's calculation is not far off the current pay of the Ministers. For the Minister, Mr Chiam thinks the Minister deserves $51,000 a month for a decent lifestyle. For the Prime Minister, $63,750. Let us round it off to $64,000. I was not sure whether this monthly pay should be multiplied by 12 or whether we should add in the 13th month payment, variable bonuses and so on.”
“I do not know whether these three lawyers were working in their father's firm and therefore given huge pay, because we never looked at their names. So we would not know who is earning what. But you are taking only the top two, and there are more lawyers earning over a million dollars than, say, CEOs of MNCs, so there is this downward bias. Also, I would make the argument that the Ministers should be on top of the job. While others will peak and go off, if the same Minister is on the job, he should be amongst the top four all the time. If his performance goes down, his energy level goes down, then, as one MP pointed out, that is the time for us to consider easing him out in as gentle a manner as we can. So it is still right to argue that whilst there is the upward bias, Ministers are expected to be amongst the top, year after year. There is also the criticism that the benchmark is not stable because of year to year variations as a result of bonuses, share options. Again, the criticism is valid. It is not as stable as you want it to be. But the committee that did the benchmarking had calculated the benchmarks over the last five years. They looked back at figures of the last five years and they looked all right. But I concede that this may not be so in the future. Again, we will fine-tune and incorporate suggestions and if there is a defect in the formula because of this instability, we will review it. Even as we revise the salaries in accordance with the formula, we will be exercising discretion. If they are spiked upwards, we will be quite careful. We are not going to link the salaries of the civil servants and the Ministers just because of a spike. We will moderate. What about other ways of deciding on Ministers' pay?”
“I have listened to the arguments but I do not think you can fault it intellectually or in principle. What you can disagree on is how to peg, where to peg. Is it the top four, is it the top 10, is it the fifth percentile, is it the tenth percentile? The details can be argued over. But when you are deciding on pay, it must be done objectively. You have got to decide in relation to something. In relation to the public sector itself, it makes no sense. It must be related to something outside and that is the private sector. Benchmarking is linked to actual pay in the private sector, of comparable job size, responsibility, requiring people of similar aptitude and talent. Yes, in benchmarking, we should take into account the different characters of the public sector and the private sector - the risk/reward ratio, the security in the civil service which is more than that in the private sector and the nature of the job itself. But ultimately, you still got to have the right pegging, because civil servants can still vote with their feet. Dr Lee Tsao Yuan and a few others have commented on the formula that there is this upward bias in the formula. Yes, the criticism is valid. There is this upward bias in the formula when you choose the top four of the six professions. Because year after year, you are choosing the top four. Individuals might have peaked and they might have gone down in their earnings. But year after year, you are choosing the best of the whole lot. But there are other biases in the benchmark which weigh the figures down. For example, if you take one profession like lawyers, there are many lawyers earning over $1 million, even young ones. In 1993, over 26 lawyers earned more than $1 million. Three of them were in the age group of 36-40.”
“This suggestion is similar to what Mrs Yu-Foo Yee Shoon and Encik Othman Haron Eusofe have suggested, that there should be a separate panel to look at all this. But the panel should not be deciding on the salaries of civil servants and Ministers, as somebody suggested. I think that will be wrong. However difficult the political problem may be, we, as the Executive, in the end must make the decision. In companies, they do not get an outsider to decide on how much directors or the CEO should be paid. Somebody from within the company must decide. They may do surveys. They may hire a consultant to advise them. But in the end, the decision must be taken from within the company. Likewise, I would not be in favour of setting up a commission to decide on the pay of civil servants and Ministers. It may be delicate, but we have to decide and we will come to Parliament from time to time to justify whatever changes to the formula there may be, or whatever pay the Ministers should be getting. The confidentiality of income tax returns will be maintained when we have this panel to examine the documents. The names will be blanked out. The committee will be sworn to secrecy and the individual taxpayer's name will not be revealed. It will be done in a manner that nobody knows who is earning what. The figures can be examined without the names. The benchmarks are not for all time. The panel will give us its comments and we will take into account MPs' comments and later on, revise the formula, when we have more experience in working the system. I shall also ask this committee to review the benchmark for the Prime Minister. On the question of benchmarking, intellectually and in principle, I do not think anyone can fault the proposal to benchmark pay to private sector earnings.”
“DPM gave me several points to choose from. We can peg it at 50% of the top four from these six professions, 60% or two-thirds. I decided on two-thirds. To repeat, 50%, 60% or two-thirds. I decided on two-thirds because I want to aim at a particular group of talent at the top. It is a matter of judgment. I think in this case, there is no science to tell me that two-thirds is the right figure, but I feel that that would be about the right level. If it proves too high and in two years' time we get a flood of applicants, good ones, to be Ministers, I can lower the salary. But if it proves too low, of course, we look at other factors too, well, we may have to come back and revise salaries further. I take the point that salaries are not the only factor in our difficulty in getting Ministers. We have to look at other factors. What I ask for today is to give the formula a try. We will try it for five years and then we review the formula. The suggestions made by MPs can be taken into account when we review the formula. I intend to set up a committee to verify the figures and calculations of the Inland Revenue Authority. Some people have expressed surprise that the figures are so high. I think it is useful to have an independent panel to look at the calculations to verify the figures, and then to have the figures published every year as they appear in the White Paper. I propose that the chairman of the panel be somebody from the Public Service Commission and then we should have the Auditor-General on the panel plus two or three others from the private sector. I will look for suitable people from the private sector to be on the panel.”
“There is a complication in deciding on what we should pay the Ministers. I can tell you that the Ministers here would not mind taking a pay cut. But if we peg the Ministers' salaries lower because of this sense of public duty which we have, we would then suppress the salaries of the Administrative Officers, the Judges, the engineers, and the other senior officers. Or do you say, "Doesn't matter. Let the Administrative Officers be paid much better than a Minister." They can do that for a few outstanding Administrative Officers, as indeed we have now. Several Administrative Officers are paid more than our Ministers. But if we suppress the Ministers' wages, that must mean suppressing generally the salaries of the civil service and the Judiciary. If we do not do that and we allow the civil service to pay them a market wage and we identify a top civil servant whom we want to be a Minister, can we persuade that civil servant to give up one-third of his pay to be a Minister? If you can do it, will you please do it for me? I do not think in a real world, that is possible. 5% or 10%, they will sacrifice. 20% or 30%, to give up a job as Permanent Secretary, Staff Grade I, to be a Minister and paid a Superscale B, I do not think that is on. So when we adjust the salaries for the public service, in particular, the salaries for the Administrative Service, we also look at the same time at the salaries of Ministers. The two are linked together. I agreed with the recommendation of DPM on the benchmark of civil servants. He saw me at the various stages of the White Paper. For the bright young civil servants, aged 32, pegging that salary to the 15th person salary earners in the whole of Singapore, no problem, I agreed. But I decided on the benchmark for Ministers.”
“In a young man's mind, the Administrative Service was blotted out. What we want to do now is to change the whole perception of the Administrative Service. We know how much doctors will earn, how much lawyers will earn. We are telling these young people that before they decide on their courses in the university, whether it is law, medicine, architecture or engineering, there is also a career which pays very well in the Government service which he ought to consider. And you could see the effect of publishing data. When the Senior Minister, some years ago, published the data on what lawyers earned, there was a palpable shift towards the Law Faculty. I think today, Prof. Walter Woon and the Law Faculty would have no trouble in recruiting bright young people to the Law Faculty. But that was not so years ago. So if parents and students know the earnings of various professions, including the civil service and the Administrative Service, they can then make informed choices at a young age before it is too late. Because once you have done law, you have done engineering, you have done medicine, architecture, it is very unlikely that bright minds, having gone through those courses, will consider joining the Government as an Administrative Officer. We have lost them. So we are going back to the 'A' levels, maybe even way before the 'A' levels, to give these young people an option, and we need some people to do the right courses to join the civil service to help us to run this place. Ministers up to now come mainly from the same pool of people - Administrative Service, SAF. Even if they do not come from within these two services but from the private sector, they would also come from within the same talent pool of people we are looking for.”
“People who will do well in the private sector, who will do well in the public sector, whom we think by the age of 32, they will be so successful that they will be earning a certain income. So those are the people whom we want, the top 15 salary earners for that age cohort of 32. For Ministers, we want people who have the ability to rank amongst the top 100 salary earners in Singapore regardless of age. So we are aiming for a very special group of people to come in. We are not saying that this is the salary, please come in. That can be a wrong way of getting people to come in. We say, who are the people out there who either earn that much, or can earn that much in time to come. And they are the people who must have certain qualities in them and the first quality must be competence, ability to make the company succeed or to be successful in the profession. And this is the point which Shanmugam grasped very clearly and it requires almost the last speaker to see this point. This is the central issue of the White Paper - the philosophical change. Also, more importantly, as Shanmugam noted, we want to let our young students know at a very young age what are their career options. At the moment, for many young people, the Administrative Service is not a career option. And again, I speak from personal experience. When I graduated, despite the bond which I was on, I wanted a transfer to the university, to be a lecturer, to do my PhD. I never knew that an Administrative Service existed. So when I was called up by the PSC and offered this job, I asked, "What's that? Administrative Officer?" I had no idea. Lecturer, I know what it was all about. Doctor, I know; lawyer, I know. But Administrative Officer, I had no idea.”
“So the Senior Minister, when he was Prime Minister, started the process. He pegged the salaries of the Administrative Officers to the private sector's equivalent, 80% of the private sector pay. But as he explained, in practice, the process was about three to four years behind time. So, in effect, the percentage was much lower than the 80% which he wanted. When DPM looked at the problem he recommended that we aim higher, peg the salaries to the top few hundred salary earners in the private sector. It is not just a question of upping salaries. It is an entirely new way of looking at things. It is a total philosophical change. We start on the basis of this question: what kind of people for Ministers and Administrative Service? What kind of people do you want to be in Government, to be running your Administrative Service, and to be in Cabinet? Do we decide on the salaries first without worrying about private sector pay and then hope to attract the best people to join the Administrative Service, which was the previous system? Or do we decide on the kind of people we must have for the Administrative Service or Cabinet and then find out what salaries these people would be capable of earning at a certain point of their career, and then use equivalent salaries to get them to come in? And that is the approach which we have opted for. It is a new way of looking at things - decide first on the kind of people you must have in Government and in the Administrative Service, and then design the salary structure to get these people to come in. Not the other way round, have a salary structure, hoping people will join us. For the Administrative Service, we want people who can be amongst the top 15 salary earners in the cohort at age 32.”
“For the public sector service, I was called up before the Public Service Commission, just one short interview, lasting 15 minutes and the job was mine, partly because I think I was on bond. But in Shell, I was first interviewed by the Personnel Manager. After a few days, I was called up, interviewed by somebody else again. I had to sit for an IQ test, written comprehension test, and had to write an essay on a subject given to me on the spot within a certain time limit. Then I was interviewed by the prospective departmental managers who had an interest in recruiting new staff - Finance and the Supply Departments - and thereafter invited to a lunch, given by the Chairman, where there were a few other senior managers to chat you up, to assess your social etiquette, your personal behaviour. At that time, I knew nothing of HAIR qualities, helicopter qualities, sense of imagination, sense of reality, and so on. But that was how Shell, in retrospect, was assessing its candidates. Now that we are in charge of the civil service, when DPM looked into the problem and told me that the system must be changed, I agreed readily. The system of Personnel Boards is now in place, but will that alone do the trick? Can we recruit the people whom we want into the civil service, just by changing the personnel management system? I think it will go a long way, but it will not be sufficient. At the end of the day, salary is still the key factor. I agree with Kanwaljit Soin that there are other factors involved, and we should look into these factors. We should attract people to join the service and, very importantly, to retain them. But at the end of day, my own belief is salaries play a big part for a young man and a young woman, just as it was for me when I was about to get married.”
“As you know, the personnel management in the civil service was not the best in the country. You have the Public Service Commission, a central body, which recruits, assesses, promotes officers, not just senior officers, but all officers in the civil service, the whole range of them. It was too centralised. The Ministries and departments which want to have the officers did not have the authority to recruit, nor the authority to promote, nor the authority to censure. That system worked for many years but it was clear to many of us that that system was not working and would not work in the future. So I asked the Deputy Prime Minister to look into how we can change the whole system which would involve changes also to the Constitution. The changes have been announced in this House, and the Personnel Boards are in place. The discussion on the White Paper must, therefore, be seen in this light against its wider purpose of changing the whole system. I know that the system must be changed, not just from my experience as an employee in a private sector company, but as a young man in the civil service. As a young man, after working for about a year in the civil service, I applied for a job in the private sector. Money does not mean much to me now. My children have grown up. My wife has her own independent means of income. My needs are much less now. But as a young man, I can tell you that money was important. I started work as an Administrative Officer, $830 per month. I was planning to get married. I looked up the advertisements, I saw an advertisement by Shell company which offered the starting pay of $1,100, and that was a big increase for a young man about to get married. So I applied for the job. I was surprised at the system of interview.”
“Then Mr Lee and I agreed that he should step down by a certain date, and I decided to take over in November 1990. When I joined politics, did I think of money? I did not know what an MP's allowance was, what a Minister of State's pay would be or whether I would be appointed Minister of State or Senior Minister of State. It was entirely up to Lee Kuan Yew or the Government or the Cabinet. But I knew what I had to give up. I gave up a chauffeur-driven company car, a Mercedes. I gave up a company house, a two-storey detached house on 10,000 square feet of land. I had never negotiated over pay. In the civil service that is not possible, or when I was working in the private sector, and I am not going to negotiate over my own pay now. This is the most difficult part in this exercise where I am here to move the motion on the White Paper to pay the civil servants and Ministers better so that they can keep Singapore going with good people. The delicate part is the Prime Minister's pay gets rolled into one with this. So it would come across that I am also pushing for the pay of the Prime Minister, that is, for myself. I intend to take out the Prime Minister's pay or the benchmark in the White Paper and ask an independent panel to review it separately. Then I can argue with moral authority what the Ministers and civil servants should be paid. It does not matter what the panel would decide. 10% less, 20% less, 30% less, it does not matter. What I want is the moral authority to be able to make a case for the civil service and for future Ministers. The White Paper was worked on mainly by the Deputy Prime Minister. Of course, he was assisted by a team of civil servants. I have tasked him with revamping the personnel administration in the civil service.”
“So I was surprised, when in 1976, the late Hon Sui Sen called me up to his office, and asked me whether I would consider standing for election. My response at that time was: give me three days to think over. At the end of the third day, I dropped him a note. I said, "Yes, I will come in." My decision was based on a very simple personal factor. I went through the upper secondary school and the university on a bursary. Without a bursary, I would not have been able to go to university. So there was no question whatsoever. I just felt that I should say yes, and serve. Of course, he explained to me why they were looking for people like me, and not from within the party. When the Senior Minister, at that time Prime Minister, was looking for a successor, I was one of those considered by my colleagues. But when I was selected by my colleagues, there were a couple of us who met in Tony Tan's house and they decided on me to be their leader, I did not jump for joy. I accepted the responsibility. That was in 1984. Even then, I was still not sure whether I was the best person to be Prime Minister. It took me some two years, and it was only in 1986 that I decided to say yes. Nobody else wanted to do it or could do it from my cohort of colleagues, and I felt that I should therefore concentrate on doing the job. At the 1988 general election, I was expected to take over the Prime Ministership from Lee Kuan Yew. Some of my colleagues were a little disappointed that I did not take over right away. They thought a change was good, but I did not. I did not feel fully confident enough to take over. So I took my time. It was only in 1990 that I felt that I could do this job competently.”
“Mr Speaker, Sir, I think it was a stroke of good luck that in 1959 Mr Lee and the PAP won the elections. Had Mr Lee and his colleagues not been in charge of Singapore, I do not believe we will be discussing the White Paper today. It would have been a very different Singapore. The best men and women of that era came forward to stand for elections to lead Singapore. They had a mission: to fight for independence, to battle with the communists, the communalists and then to build Singapore from scratch when Singapore separated from Malaysia. Can we recreate those circumstances and produce similar men and women who would respond to this noble calling of politics? I start on the assumption that that period is over. I hope it does not come again, because if it comes again, it means we would require a very different set of people to volunteer, to fight, to deal with crisis, with big problems, to sacrifice pay, forget all about the benchmark and so on. I hope we do not have to repeat that period. So I start on the assumption that Singapore is going to be successful. That is my job. That is the job of my colleagues. If we succeed in keeping Singapore going, then how do we get people to come in under very different circumstances? I never joined the PAP before I became a Member of Parliament. I knew very little about the PAP. I attended election rallies. I listened to Lee Kuan Yew speaking at election rallies at Pasir Panjang. I followed what he spoke in the newspapers and listened to the radio. But beyond that, there was no special interest in joining the PAP. I was not in the CCC. I was not active in helping the PAP through their grassroots organisations. I was concentrating on my career when I was a young man in the public service, and later on in Neptune Orient Lines.”
“Fortunately, I am not a female. I have already explained to the Prime Minister that in China, xia hai means you resign from public office to go into commerce. But for me, I am still spending at least half my working time in the constituency, in the Feedback Unit, in the Town Council and in other public duties. I left the university not because of money. If I had continued to stay in NUS and drawing the pay of Associate Professor and with the pay of my wife in a polytechnic plus our savings, we have enough to pay for our family expenditure and the overseas education of my two children. We lead a simple life, and our demands on material things are not very high. I left the university for reasons other than money. The main reason is that I will have the opportunity to lead my company to develop in China and other places. I get the returns on investments for my company. At the same time, I hope through the enterprise, I will be able to achieve my task, carry out my wish, accomplish my mission, and also fulfil my promises to a friend (a former Minister of State) who entrusted me with a duty before he died. This kind of aspiration and sentiment cannot be understood by those who gauge people by dollars and cents ( ).”
“If the Singapore economy is not properly planned and managed, then COE prices will no longer be a problem, instead, we will face more serious problems such as lowering of real income for the workers, the investors do not come in, widespread unemployment, and even problems which threaten the very survival of our country. Let me summarise, Mr Speaker, Sir. On the whole, I support the basic principles of the White Paper. But from the feedback collected, I feel that we should not be rash in setting benchmarks for Ministers' and top civil servants' pay. This is a very important issue with far-reaching effects. We should consider sending the White Paper to a Select Committee to collect more views and then make the necessary adjustments to the proposals in the White Paper. We should also allow the public time to digest the principles of the White Paper and accept the extra amount for Ministerial salaries as reasonable. Finally, let me make one observation. In 1991, apart from Mr Ong Teng Cheong who became the Elected President, four resigned their Ministerial posts. I do not know and need not know why they left, but we can be sure that these Ministers have left not because of money. This gives us a lesson: high pay may reduce the difficulties of attracting talent into politics, but will not necessarily retain talents. Apart from salary, intangible factors such as challenges of the job, sense of participation in policy making, and the camaraderie among colleagues will also affect a person's decision to stay or leave. Talents are hard to seek, they are even harder to keep. The Prime Minister seems to like the term xia hai, ( ) "going down to the ocean". On 3rd December last year, he mentioned that I resigned from a 22-year old University post to go into "the sea of commerce".”
“Further, after the Ministers leave the entire administrative machinery, will they be able to earn as much outside? The third reason for the controversy is that inevitably, some would want to compare their own pay with the Ministers' pay. In addition, there are those with ulterior motives who would try to stir the ground and make this a sensitive and emotional issue. This year, many people are unhappy: housewives and retirees who have neither paid any tax before have to make adjustments for GST; civil servants are still grumbling about the changes in medical benefits, and those who aspire to own cars are complaining about high increases in COE prices. We cannot afford to ignore the feelings from the ground. Objectively, in every economic system, salaries and wages are determined by demand and supply. If we are left with only one garbage collector, then his pay will certainly be higher than that of a lawyer. In China, some intellectuals lament that scientists who are able to make guided missiles ( ) do not get as much as the hawkers who sell "tea-leaf" eggs ( ). In every economic system, the structure of salaries and wages reflects the relative scarcity of jobs. On this basis, we aim to achieve "from each his best, to each his worth" ( ). We must explain to the people this principle so that they have a sense of proportion in dealing with this issue. We must spend much time and effort to explain patiently the intention of the White Paper, and to convince them of the need to attract the right talent with high pay to run this country, and of the importance of maintaining a clean, upright and able government. We are in an age of rapid changes.”
“So they ask: what is the price for the spirit of commitment? They also ask: are we giving the wrong signal to accentuate the trends towards materialism? Many participants in the dialogue also felt that those who go into politics should have noble ideals and a high degree of commitment. Although 26 of the participants agreed that the pay of top civil servants and Ministers should be pegged to the private sector, only 11 agreed that this linkage should be made for the Ministers. Maybe some feel that these participants are too idealistic and even outmoded in their thinking and that they belong to the age of the dinosaurs. However, I feel that it is fortunate for our society that we have such people around. Like the late Dr Ee Peng Liang, we know that he never mentioned about his pay. He worked for the society. If we all think of our market value and our opportunity costs, what kind of society will we become? Another reason for the controversy is that some people, including most of the participants in the dialogue, agreed that Ministers should enjoy high pay because they carry very heavy responsibilities and times have changed. Times are different, as the Prime Minister also mentioned. It is only with high pay that we can attract talents to the governing team. However, they feel that some Ministers do not deserve such high pay. In other words, they separate "Ministerial posts" from "individuals". Singapore is a very small place. Every person knows what sort of pay certain Ministers are drawing before they joined politics. If their pay before they entered politics was lower than their current Ministers' pay, then it is very difficult to convince people that they are making any financial sacrifices after entering politics.”
“Similarly, if we are concerned that the widening of income gap between professionals in the private sector and civil servants in the public sector will affect the career choice of school-leavers and reduce the number joining the public sector, then we should select even more professionals, including architects and doctors, as the basis for benchmarking top civil servants' pay in order to broaden the database. Moreover, these occupations and jobs for benchmarking civil servants' pay need not necessarily be similar to those selected for benchmarking the Ministers' pay. However, whatever the method of calculation, whether there is discount or not, we still have to position the pay of the top civil servants and the Ministers. The final question is whether the levels of the salaries will be acceptable to the people. Mr Speaker, Sir, the controversy is not so much on civil servants' pay but more on Ministers' pay. Each time, when adjustment of pay for Ministers is made, there will always be controversy. I ask myself why Ministerial salary should cause such controversy. I believe that there are three main reasons. The first reason is that some people feel that the Ministers' work and the work of the executives and professionals in the private sector are not the same in nature. They are not even comparable. Ministers have power and social status. The Ministers' collective or individual performance is not like those in the private sector who are assessed by profit and the bottom line. More importantly, Ministerial posts are public service. Ministers are expected to have altruism and commitment. Many social workers, community leaders, town councillors and union leaders also sacrifice their time, their privacy and they serve the society and the people without a single cent.”
“Another example is that architects, doctors, accountants, engineers and lawyers have all the time been regarded as professionals, but architects and doctors are excluded from the professions selected for benchmarking. The White Paper has pointed out that "a good architect does not necessarily make a good Minister, and vice versa". I agree with this view. However, this statement is equally applicable to bankers, accountants, engineers and lawyers. Outstanding Ministers for Finance, like Dr Goh Keng Swee, Mr Hon Sui Sen and Dr Richard Hu, were not bankers, and Dr Hu came from an oil company. The position of Minister for National Development need not be taken up by an architect, and similarly, the Minister for Health need not be a doctor. For benchmarking, the selection of jobs should be jobs which are more comparable or similar to the jobs of Ministers, which require general management skills, and not specific technical expertise or other special skills. In other words, the CEOs, the general managers, and top executives in the private sector should be more appropriate than professionals for benchmarking. I also feel that if only six professions and only four earners from each of the professions are selected for benchmarking, then the database will be too narrow, and this may also make the average salaries unstable and unreliable. Perhaps we should consider using more general occupations (occupations of general talents and not of expertise) and percentile for the benchmarking. Another proposal is to select all the local CEOs and top executives' pay and use their average income as benchmarking for the salary of Ministers. This way of calculation may be more acceptable to the people, and the database will be broader for comparison.”
“Why select only the top four of each profession as the benchmark of the starting salary of the Minister? Why select the 32-year old and the 15th position of the private sector's pay as the senior civil servant's benchmark? The participants also expressed two views: first, the benchmark was based on incomes of the top four earners in 1992, but because of profits and losses, these top four earners may not be able to maintain their positions as the top four in future. That is to say, after some years, they could be replaced by others. But the Ministers' salaries are pegged to any top four earners in each of the six selected professions, or the average earnings of the 24 top earners. This kind of calculation is upward biased, as it reduces the possibility of downward adjustment and the magnitude of decline of the Ministers' pay. The other view expressed by the participants was that if the pay of Ministers and top civil servants is to be pegged to the private sector, then to some extent they should also be tested by market forces. The salaries should reflect the job size and their performance. Although the White Paper has spent a lot of space in explaining the need and the criteria of the benchmarking, I feel that the White Paper is not very convincing, and in many places, the arguments are even subjective or even arbitrary. For example, if the local top executives, because of the nature of their work, are more comparable with that of the Ministers, then regardless of whether they are in local manufacturing, MNCs, oil companies or other companies, they should all be included for benchmarking.”
“This is to avoid the controversy or even political issue that arises every time the salaries of Ministers and top civil servants are adjusted. We must, and we have the right to, create our own model. We must remind ourselves that we are not talking about the salaries of a few Ministers and top civil servants. Our focus should be on how "to attract the right talents and to maintain the integrity of the Government with high and proper salaries" ( ). This is to ensure that we maintain a clean, upright and able Government, which is our precious asset. While many countries are practising money politics and suffering from malpractices and corruption, we should value and treasure this asset even more. This asset is one of the prerequisites for Singapore's survival. I understand the problems faced by the Prime Minister in attracting talents. I also know the feelings of the Prime Minister on this issue. But as the Chairman of the Feedback Unit, I must also sincerely tell him the feedback from the ground. The ground feedback is not very favourable. On 26th October, the Feedback Unit held a dialogue with 37 community leaders, union leaders and professionals on the White Paper. On 28th October, I wrote to the Prime Minister to brief him on the main points raised in the dialogue. All participants in this dialogue agreed that the Ministers should be well paid and many even suggested that after the Ministers have retired after successfully discharging their duties, they should be given better retirement benefits in addition to the pensions. But except for two, all the other participants were against or expressed their doubts about the two criteria of the benchmarking and the methodology of formulating the benchmark: why select only six professions?”
“I therefore ask this House to endorse the White Paper on "Competitive Salaries for Competent and Honest Government" as the basis for setting salaries of Ministers and senior public officers. Question proposed. 4.03 pm Dr Ow Chin Hock (Leng Kee)( In Mandarin): Mr Speaker, Sir, I support the Prime Minister's motion. First, let me deal with the principles set out in the White Paper. I endorse these principles. The first principle is "transparency of salaries". We should give Ministers and top civil servants clean and realistic salaries, and not like many other countries where the salaries of ministers and civil servants are deliberately kept down, but there are all kinds of perks and allowances to enhance their incomes. The second principle is "high salaries to attract talents". I support the principle that the pay of Ministers and top civil servants should be linked to the private sector and relativity with it should be maintained. The reasons are very simple: in an age of high growth, high reward and high expectations, the public sector must adjust its salaries so as to be competitive with the private sector for the limited talents, as the Prime Minister mentioned just now. Regionalisation has also made this competition keener. The public sector should have a certain proportion of talents in order to maintain the policy of Government by the talented ( ). Of course, salary is not the only way to attract talents. The third principle is "benchmarking of salaries". I also endorse that benchmarks must be set for the salaries of Ministers and top civil servants in accordance with the fluctuations and adjustments in the private sector automatically.”
“If we succeed, as we have done in the last five years, $22 million a year for my team under the new formula to be implemented over several years, is small beer. Measure the $22 million against the cost to you of having an incompetent and corrupt Government. Wrong policies and corruption could easily reduce Singapore's economic growth by a couple of percentage points - 2-3%. Our GDP is $89 billion. A 1% growth is worth $890 million. A 3% reduction in growth as a result of mismanagement and corruption will cost Singapore $2,670 million. This is not a paper loss to the economy. It is an actual loss coming out of your wages and profits. It will be penny wise and pound foolish, if you deny me the means to get the best people into Government. This will not be the last occasion that the Government explains and justifies its policy for paying Ministers and top civil servants. But the White Paper will carry the debate forward, and save us from covering the same ground over and over again. The policy proposed in the White Paper is essential to maintain the quality of the Government over the next 15 to 20 years, when high growth in the region will make it more difficult than ever for us to recruit outstanding men and women to become civil servants and Ministers. We need to change the perception of an Administrative Service career among Singaporeans, and especially among ambitious young people who are leaving school, and choosing scholarships and professions. We also need more Singaporeans to come forward to serve as Ministers, to lead Singapore and maintain the prosperity and security we now take for granted. The White Paper, I hope, can help us to do that.”
“Though a Minister may not earn the same amount in the private sector, I must be satisfied that his responsibilities and performance as a Minister, in particular, his political contribution, justify his being made a Minister. So we do not appoint young MPs as Ministers rightaway. They have to prove themselves first. A few, when they were appointed as Minister of State or Parliamentary Secretary, did take a pay cut, like Dr Ker Sin Tze and Ho Peng Kee. There was real financial sacrifice. I need a team to run the country. $600,000 a year for a Minister will seem a lot to most Singaporeans. Even $300,000 will seem a lot to them. But see it from a bird's eye view, and not a worm's eye view. See it in perspective. The total cost this year for all the political office-holders, from Political Secretaries to Prime Minister, is $17 million a year. Weigh this against the GDP of $89,000 million. That is what we are responsible for. I am asking today for your endorsement of a formula to pay civil servants and Ministers. Judge the correctness of the formula by results, not by comparing what you are earning with the salaries of the Ministers and senior civil servants. You should ask yourself whether the Cabinet as a team is worth the $17 million today. Like durians, the proof is in the eating. You should get what you pay for. My task is to achieve and sustain the highest standard of Government in terms of incorruptibility, integrity, and competence so that you will enjoy the highest standard of living possible. My Government must produce jobs, pay increases, homes, schools, social harmony, economic growth, the lot which gives you a better life.”
“The benchmarks will be updated annually, and public sector salaries will be correspondingly revised. The Government will also review the salaries of all the other services, for which benchmarks have already been established. Salaries will be adjusted service by service, as and when they get out of line. Infrequent but large service wide salary revisions, in which all services automatically get a raise, will be a thing of the past. At present, both Ministers' and civil servants' salaries are considerably below the benchmarks. Staff Grade I Ministers earn less than half (48% to be exact) the average of top private sector professionals, compared to the target of two-thirds. Superscale G officers earn 80% of their benchmark figure. We will revise salaries for civil servants, not overnight but progressively, to reach the benchmarks over three years. For Ministers, the adjustment will be even more gradual. Bear in mind that even after the revision is complete, at two-thirds the private sector, there will still be about 100 people in the private sector earning more than a Staff Grade I Minister. These 100 are income-earners. They do not include entrepreneurs, owners of businesses, stockbrokers. If we include them, far more than 100 Singaporeans earn more than a Staff Grade I Minister. Ministers vary in their ability, and in their private sector earning power. But I have no doubt that more than half of my Cabinet would have been among the top 100 salary earners, had they opted for a private sector career. I cannot truthfully say that all Ministers will get what they are being paid if they were in the private sector. But in politics, I need a balanced team, to reflect the political realities in Singapore.”