Lee Kuan Yew
Singapore
“Sir, I had not intended to intervene in any debate. But I was doing physiotherapy just now and reading the newspapers and I thought I should bring the House back to earth. Mr Rajaratnam had great virtues in the midst of despondency after a series of race riots when we were thrown out during Independence.”
“A point of clarification, Sir. The Member has compared Singapore against Switzerland, Denmark and Finland. Can I ask him if he considers Singapore's population to resource ratio equal to Denmark, Switzerland and Finland?”
“The Member has not answered my question. Is he saying that we are comparing apples with apples? Is he saying that the system of government in Finland, Denmark and Switzerland can bring them from First World to a superpower? Can they do that?”
“I am putting a simple question and ask for his clarification. He has compared Singapore as if it were a Denmark, a Switzerland or a Finland. Their system, their governments, never produced the kind of transformation that we have had, and their system and their governments have a broader base, and can afford a mediocre government.”
“At the end of the day, that will be the same for the Malays, for the Indians and for all the others. S Rajaratnam was aiming for the stars. I went along with him with the pledge, and we must try to live up to the pledge. But to say, let us forget race, language, religion, culture, that is not doable.”
“So there is a wide range of options open and it depends on your judgment on the quality of the people you appoint, and also what is the objective of appointing people to these positions, whether you want them to stay effectively until retirement, which means you have to avoid appointing good people to these positions early which is, I thi…”
The complete record
Every one of 506 lines we hold for Lee Kuan Yew, in date order, each linked to its source. Free to read, in full, without an account. Page 6 of 11.
“Mr Speaker, Sir, my generation of political leaders have become dinosaurs, an extinct breed of men who went into politics because of the passion of their convictions. The problem now is a simple one: How to select younger leaders when the conditions that had motivated the Old Guards to sacrifice promising prospects of a good life for a political cause no longer obtain in a completely different social climate? This change in climate is inevitable with economic progress and a change in social values. In the 1960s and 1970s, as prime minister, I responded to this problem by a gradual increase in pay to reduce the big gap with the private sector. But in the 1980s, it no longer worked. So in 1984, I decided to target Ministers' salaries at 80% of their private sector counterparts. Before I go on, perhaps I should take the point made by Stephen Lee. Are they comparable? Men for specific jobs are comparable, and the higher you go up, whether it is in the profession, whether it is in the corporate world, whether it is in politics, you are looking for these qualities. I have spent 40 years trying to select men for big jobs - Ministers, civil servants, statutory boards' Chairmen. So I have gone through many systems, spoken to many CEOs, how did they select. Finally, I decided that Shell had the best system of them all, and the Government switched from 40 attributes to three, which they call "helicopter quality", which they have implemented, and they are able to judge their executives worldwide, and grade them for helicopter quality. What are they? Powers of analysis: Logical grasp of the facts, concentration on the basic points, extracting the principles. You score high marks in Mathematics, you've got it. But that is not enough.”
“During World War II, they had to transfer these assets to America in exchange for military supplies and mothballed American warships. This was a major reason for the decline of British standards of life after the war. We invest in East Asia but in a careful and steady way. We can start with 2-3% of our reserves. Over the next 10-15 years, we can increase it up to 30-35% of our reserves, concentrating on the most stable of the higher growth economies of East Asia. If our judgments are right, Singaporeans will enjoy a boost from this steady flow of additional wealth. But to ensure good judgment, we need able people in the Cabinet and in the civil service. East Asia is in the midst of a historic transformation. In 20-30 years' time, there will be a belt of industrialised nations from Korea, Japan, China, Vietnam, ASEAN, including Indonesia. Singapore must retain its niche in this thriving region by upgrading our contribution as the region's economies industrialise. Singapore has a role as a catalyst for change and growth in this region. More than any other country, we will need a well-educated and skilled people to fulfil this role as a services and information centre in an information age. In short, our success depends on our having capable, honest and creative leaders in charge of Singapore. [Applause].”
“Meanwhile, very extensive investments are already stuck into the ground. Not every investment will be a winner. And some investors will lose their shirts through bad judgement or maybe even just bad luck. But on a rising tide, and the tide is rising for East Asia, more ships will safely sail through than will be shipwrecked. And we have got to hope that at least seven out of 10 of our investments will succeed. We have the experience and economic development, and we have the expertise in the areas of economic development that these fast emerging economies need. And most of all, we have the high savings which we have accumulated over the years. Hitherto, we have invested the savings carefully and conservatively, in passive investments in America, Europe and Japan, passive in that we are not managing the enterprises. We are just taking an equity share, buying the shares or bonds on the market. We can now make a strategic choice to take a part of our savings and invest them directly in infrastructure, in industrial projects, in hotels, tourist facilities, office blocks and all properties. Infrastructure alone has been estimated to cost over a trillion dollars, US$1,000 billion is what it will cost China, Vietnam and the rest of East Asia to meet the power, airports, transportation and other needs. With the right investment decisions in the next 10 years, by 2015, within the lifetime of this present generation, Singaporeans can become like what the British were before World War II, or like what the Swiss are today, owners of vast high yielding assets overseas. British standards of living and quality of life, for years and years, were boosted by their incomes from investments from the US, Canada, Brazil, Argentina, India, Africa, and Australasia.”
“Many cities like Ho Chi Minh city, Hanoi, Yangon, Jakarta, Medan, Surabaya, Kuala Lumpur, Johor Bahru, Penang, Bangkok, Chiangmai, Beijing, Shanghai, Ningbo, Qingdao, Tianjin, Dalian, they are at prices lower than the Singapore CBD in the 1960s. In 20 to 30 years' time, their prices will be like Singapore's CBD in the 1990s. Of course, not all will be winners. Some will be big winners. Some cities will rise faster and higher than others - those with the better administration, the better planning, plus the higher economic growth. The trick is to guess which country has the better people and the better government for economic progress because it is the people and government that decide. In other words, you will then assess which cities in these countries will be their main growth centres. And the secret really lies in correctly forecasting which culture is most supportive of growth and modernisation, which will have the best educated people, especially in engineering and technology, and which will continue to have good government. If you had bought into Colombo in the 1950s and the 1960s, and it looked promising in the 1950s, but came the 1960s and 1970s and now we see it has petered out. It is sad and it is a problem that will not go away once you are snarling and shooting and killing each other. Choose the wrong place and you will have to write off your assets. We are well placed to make these investments. Remember they are not risk free. I knew a very experienced investor of hotels. And he went into Manila when Mrs Aquino was in charge and he said it had reached bottom. He was wrong. It had not reached bottom. And now he has got to wait for President Ramos to get power put right, security restored, and the tourists to come back.”
“And for the executives, 20-25% executives, professionals, businessmen and supervisors will have to work abroad or will do business with people abroad for some years of their lives, especially between the ages of 25 and 50. They will need to know the language and culture of the countries they will work in or travel to, I think, primarily the ASEAN countries, Vietnam, China and Myanmar. But our universities are geared to the old and they only teach American, Japanese and European Studies. The big opportunities for us will be in ASEAN and East Asia. So besides Bahasa Malaysia, we must teach Bahasa Indonesia, which has different rhythms, pronunciation and uses different idioms. We also must teach some Vietnamese, Burmese, Thai and business Mandarin. In the next few years, because of competition from China, Vietnam, Myanmar, the ASEAN countries will have to deregulate and liberalise their economies. I do not think they will sit idly by and watch investments being sucked away to countries with lower wages, cheaper land, water, power. If we in Singapore make the right investments in the next 10 years, our children and grandchildren will be beneficiaries. We can buy into high growth countries whilst prices are still at basement level. The economic transformation of these countries is in its early phase. They are not going to grow rich overnight. But when these countries develop, as I am convinced they will, it will be as if you had bought land at Shenton Way or Orchard Road at early 1960 prices, and in 30 years you will find these properties going up 100 to 250 times as they have in Singapore in the 1990s.”
“Their salaries will go up because many of them will have to go and work in developing countries to supervise the new factories and the offices being relocated there. And it will take many years before the developing countries produce their own supply of qualified personnel for the top jobs. So this is the dilemma that the Europeans are facing and the Americans are facing. The difference is the Americans see this and they are out chasing the new jobs in the new sectors abroad. The Europeans want to stay at home, high unemployment, unwilling to change, heavy welfare subsidies which make the worker even less willing to change, and the price is economic stagnation. We in Singapore are totally plugged into this world net. And if we do not get our less educated workers, those still young enough in their 20s or 30s and even those in their early 40s into night classes, weekend classes, or vocational classes to learn and upgrade themselves, in 10-15 years we are going to have the same problem here. So we start now. Many who do simple jobs like line operators will find their jobs transferred to lower wage countries, or will have them automated. I went to a Sony factory in Jurong. It is the top of the line, whole rows of machines in a dimly lit room and one man watching six or seven such machines, and all he has to do was to watch a stand - green, amber, red - and he has got his console and he will know what has gone wrong and he has got to attend to it for a whole series of machines. So he will have to learn to work robots or automatic machines and those who do not upgrade themselves are seriously at risk. Our younger workers must have higher specialisations, because jobs will be more complex.”
“Does it work? We have in the present team men who can anticipate difficulties, work out the best of practical solutions, choose one and implement it vigorously, with the support of the majority, if not at the beginning, then at the end of the process. They can defend their positions and meet any attack or argument, either in Parliament, in the media, or anywhere else. This is the beginning of a unique Singapore system. It is not within my hands but in their hands to take the system forward. The challenge of the future will be totally different from the past. Ministers must adjust their policies to fit major world trends, and one major world trend is the rapid industrialisation of the region and our participation in it requires many changes in our education, in our investment and our tax policies. The ease with which industries are being relocated means that the pay for unskilled jobs will be held down by the abundance of such workers in the Third World. In addition, the fax and the computer have given companies that do not relocate, the facility to transfer parts of their operations to low wage Third World countries. For example, Cathay Pacific Airways is shifting its data processing centre from Hongkong to Guangzhou; SIA is transferring its manual checking of flight coupons to Bombay. So if you are an ordinary clerk, there is no need for SIA to employ you. You have to be a very good skilled computer programmer working a computer, you may be of value. At the upper end, for managers, executives, accountants, engineers, professionals, and specialists, they will be in short supply, both in the developed and the developing world.”
“We were confident that a sound person would logically come to only a few alternative solutions once he applies his mind to the problems that we face, because we do not have such a wide margin for experimentation. As we renewed the team of MPs in Parliament every four years, we improved on the selection process. But even with the most careful of selection procedures, the attrition rate was high, at first about 30%, later 20%. It is a tough system. It is one I helped to build and it will be painful to see it falter. But it is foolish to believe that good men in Singapore will naturally go into politics. The original team was fortuitous, a fluke, if you will, or a stroke of destiny. But that old guard exerted strenuous efforts to get together the present team. There are many political parties in Singapore. They regularly contest elections. But apart from the Communist Party of Malaya and the PAP, in Singapore no party has ever got together a team of substantial men or leaders who are credible because in Singapore society, well-educated and upright men and women with promising alternative careers do not go into politics. They never have gone, they have to be persuaded. The reasons are in our history and in our culture. As a result of this tough system that we have established, I think nobody doubts that Singapore leaders are not equated with used car salesmen or in that category. People accept that our leaders are straight and they are capable. The complaint is some lead too much with their heads and not with their hearts. This system is not to be found in any theory of government or written up in any book on constitutional government. It is one which the PAP old guards have worked out after going through the hard school of experience. The results are in the final test.”
“A bad system will not have this strength to survive bad leaders. Bad leaders are usually overthrown in a coup or a revolution and the next leader inevitably changes the system again, never establishing anything more enduring in the hearts of their people. And that is Africa. They are always going through some change. You change the name of the country from Equatorial Africa to some historic name in some distant past and hope you will leave the bad luck behind. But it is not established in the minds of the people. Because we do not have a long-established democratic constitutional system of government and if institutions are not rooted in the hearts of the people for them to respect whoever wields power through those institutions, the consequences for us can be dreadful with bad leaders. Because we dreaded these consequences, following a decline in standards of Ministers, my older colleagues, Dr Goh Keng Swee, Rajaratnam, Lim Kim San and I, broke away from the conventional practice of choosing election candidates and Ministers from the activists who had joined us. Had we continued that conventional system, the history of Singapore would be different and you would not be here, and Singapore would not be this kind of a place. Instead we went out to recruit the best of each year's crop regardless of their politicals ideology, dogma, or philosophy. We looked for people, first, with a good character. That is the first qualification. What is the character of the man. Second, a good mind. We ignored whether a man or woman was critical of the PAP or against some of our policies.”
“The disillusionment in Britain is even deeper. I have not read the full editorial, but this editorial in the Daily Telegraph was picked up in the IHT, 12th January, 1994, that is two days ago. It is entitled "Alas, a Sorry Tory Lot." 'In the eyes of the public, the government appears increasingly mired in sleaze. The only regret displayed by ministers for public or private lapses from grace concerns their loss of office, not the actions which caused it. We have a Tory Party apparently incapable of shame. Conservative MPs and parliamentary candidates today are, for the most part, a sorry lot. A generation ago, Central Office and constituency parties decided to turn away from selecting candidates of "traditional" Tory backgrounds. [He puts in quote "traditional". That means the class that has supplied this kind of people as MPs.] The products of Eton and the squirearchy found themselves spurned. Perhaps it was right to seek a new style of Tory MP. But what has emerged, in place of the old knights of the shire, is a host of frankly inadequate men and women who, far from entering Parliament in any spirit of public service, are driven solely by the pursuit of self-advancement.' If that had come from a Labour Party paper, I would have understood it. But the Daily Telegraph is Britain's most consistent Tory newspaper. It believes in conservatism. It has stood by the Tory Party. It is holding up its hands in despair. But long-established democratic constitutional systems have institutions which are cherished in the hearts of their people and therefore can command their loyalty even when they do not approve of the leaders who are temporarily in charge. So countries like America and Britain can recover without serious damage if and when good leaders replace the poor ones.”
“This essay was by Michael Kinsley and he described the dilemma in America in an essay entitled "Is Democracy Losing Its Romance?". It is in the Time magazine of 17th January, 1994. It is in the second last page. He explains why the democratic system has not delivered. This is one of the honest pieces. Because the litany, the mantra, has been: you have democracy and you have the free market, you will be like America. It is not true. You look at Poland, Hungary and Czechoslovakia, the Soviet Union or the Russian Republic. I will just read one paragraph, the third last paragraph of this thoughtful piece where he admits it is not working: `Even in the heartland of "traditional" democracy, the United States of America, there are whiffs of disenchantment. The "populism" surging through American politics these days has a certain antidemocratic flavor. Or, at least, it reflects a resentment of democratic institutions and procedures. "Washington" [those who comprise Washington politics] and politicians have replaced "Wall Street" and rich businessmen as populism's favorite targets. The favorite populist remedies - congressional term limits, a balanced-budget amendment - would be new constraints on democracy. And, like earlier versions, today's populism hungers for a strong leader on a white horse. Thus Ross Perot, America's would-be Fujimori.' They are tired, tired of lies, tired of broken promises, but, at the end of it all, tired of the lack of progress in their lives. Their problems are not being solved because they are going through the motions of democracy. You have committees, you have this, you pass legislation, you block each other. It is a game. If we play those games here, we are finished. These are established societies. Ours is not.”
“To make money, Ministers and politicians keep diaries so that they can sell gossip and scandal by writing books when they are out of office, and earn big money through serialisation in the newspapers. I ask you to remember a very simple rule of thumb. If you want good government, you need good leaders. You do not get good government by just a good system of government. That is a fallacy. Even in the best of systems, if the leaders in charge are bad, the government will be bad. When the best have not gone into politics, the system has always worked poorly, malfunctioned. This has been the case in America and in Britain for some time. People in America and Britain are growing disillusioned with their systems. Because it does not work, they start finding fault finally with the system because they toss out one, they try the other, it does not work. So they say, "Well, the system is at fault. Let us change it. From first-past-the-post to proportional representation, we will have coalition governments like the Europeans, then we may be all right." It is funking reality. The reality is, your system does not attract honest and able men to take on the job. The result is the second best. The result is second rate performance. There was an essay in Time magazine. This is just the last few days which also made me decide to intervene in this debate. As I was reading the monthly magazines and the weeklies in the newspapers, it occurred to me that perhaps I should share some of my thoughts with Members of this House. I have one advantage in that nobody believes that I am calculating for the next 10, 20, 30 years. I want to leave behind something, which I hope will be useful to you in your job because you have to look forward to the next 10, 20, 30 years.”
“Or you end up with Aldo Moro, former President of Italy, many many times, now facing serious charges that he was linked up with the Italian Mafia. So far, Singapore has succeeded in being different and this is in spite of constant exposure to money and politics. Singapore businessmen do business in these countries and have to abide by the local rules. But if they come back and bring those local practices from elsewhere into Singapore, we would lose a vital competitive advantage, which will do grievous harm to our economy. One reason why we are what we are is because of this competitive advantage, and corruption will do grievous harm to our lives. Corruption has destroyed many developing countries in Asia, Africa, Latin America and it has severely damaged developed countries like Italy and Japan. Because the best have not gone into politics, the results have been bad for these developed countries. Over the last ten years there has been growing disillusionment, especially in the United States and the United Kingdom, with politicians. Opinion polls show the public's ever lower opinion of politicians, MPs and Ministers in Britain, or Congressmen and Senators in America. I do not want to be accused of passing judgment myself. So I will read what Neville Stack, who writes for a British paper, and who also gets carried in the Business Times of 7th January, 1994, says. He says that the polls say that the people rate politicians way down with used car dealers for their "trustworthiness and veracity." It is because of their lack of honesty, especially in their political campaigns, and the ease with which they abandoned their political platforms after they have been elected, that is also losing them respect.”
“If we do not get the best into political office in Singapore, we will become like any one of those countries where voters change bumbling governments regularly, every three, four, five years, always in the hope of finding something better, but inevitably, getting disappointed. And with this will come a deadly disease of money politics. Marcos earned US$5,000 a year. You convert his pesos into US dollars, it was US$5,000. I calculated all this some years ago for the sake of a debate here. His progeny, according to the Philippines government are worth anywhere between $5-$10 billion. But the country has been cleaned out and it is in debt to the tune of $29 billion. That's for getting a President at US$5,000 a year, paid in pesos. But when we talk of the euphemism of money politics, we are really glossing over something much more profound, much more disconcerting. It is money and politics, which are found in many countries, mostly developing and some developed. When candidates invest large sums of money to get themselves elected, either to a party and then to Parliament, when they get into office, they must get the expenses covered. Because an investment has been made, the expenditure you put down in the loss account. So you must have an income account. And not only must you cover the expenditure to make the venture worthwhile, you must also build up a credit for the next round. After you have done that once or twice, you say, well, there will come a day when you are not going to contest any more, so you must have a retirement fund. And in the end, you end up, as was discovered, with gold bars, share scrips, cash and so on when they raided the home of a respected LDP leader called Shin Kanemaru.”
“The disadvantage, of course, of pegging the PM's salary to bankers alone is that the comparison is only with a few individuals in the private sector. So an alternative would be to peg the PM's pay to the earnings of top professionals in a representative range of companies. For example, we could peg it to the average earnings of the top three or four men in each of six professions. The top three or four average of six groups: bankers, lawyers, engineers, accountants, MNC manufacturers and local manufacturers, as for the permanent secretaries. These are professions where general management and leadership skills, and not just specialised technical expertise, are important. And they will give a broader basis for comparison. Singapore has a rising economy in a booming region. This region will boom for another 10-20 years, at least. The total pay for all Ministers, Ministers of State, Parliamentary Secretaries for 1993 was $14 million. After the revision, it will be $18 million. So when we get excited about this, please remember it is $4 million. One word from the Minister in Kuala Lumpur, the stock market went down by a few billion Ringgit. So keep a sense of perspective. It is 0.74% of $2.4 billion which is the wages of all the Government employees. And remember this is an economy which last year had a GDP of $84 billion and will increase by another 6-8%. Real estate agents get 2% on every deal. If I were a young man again and I was choosing my options, I would consider coming into politics if you would pay me 0.002% of the GDP to be Prime Minister. Then I will take it on. So have a sense of proportion. Do not believe that you will find them like pebbles on a beach.”
“In my time, I looked at the Minister, then I decided how. First, I looked at the team and I judged realistically what each member of that team can carry. Then I load the heavy jobs on the Ministers with the broad shoulders. If you do not do that, then you will be in trouble. Never give a Minister more than his shoulders can carry. One-third, therefore, is variable and performance related. And the NWC's guidelines say one-fifth, 20%, but we keep it variable up to one-third. I believe this matter should be got out of the way by settling a formula for Ministers and top civil servants, linking their pay to incomes in the private sector, so that there is no need to come and justify a salary revision every three or four years. Adjustments can then be made automatically based on IRAS figures. They come in every year. Inland Revenue gets it. The formula can be worked out and it will go up or down with the private sector, and never get seriously out of line. One possibility is to peg the pay of the Prime Minister to the income of bankers, say, 80% of the average of the top three or four bankers in Singapore. Ministers' pay can then be pegged to the PM's, ranging from 60% to 70% of the PM's, which I think is over generous, but never mind. Banking is a good approximation to the work of a Prime Minister. The CEO of a bank has to judge which enterprises are viable and credit worthy, which economic sectors are at risk. A bank's business covers all sectors of the whole economy of a country. So when the economy goes down, the bank must go down. When the economy flourishes, the bank must flourish. And the PM's work also covers the whole economy, plus political, security, social, educational, cultural, all sectors of life.”
“Because one is stuck to his renminbi, fixed salary, the other is dealing with tourists who come in with US dollars, Deutschemark, Japanese yen, Hong Kong dollars or Sing dollars. But in the end, will the taxi driver earn more? Because you can have any number of people becoming taxi drivers. And in the end, when you have an ordered state of society, students want to learn, not everybody can be a professor. So it will find its balance. When the Government announced the gross salaries of the Prime Minister as $96,000 a month and Ministers at $64,000 a month, astonishment and shock, surprise. Why so large? These are gross salaries. The base pay for the Prime Minister is $45,867 and for Ministers, there is a range between $26,932 and $33,261. Because we live in this computer age, adjustments are made in percentage terms and the figures are not rounded off. The total remuneration includes all annual bonuses: the 13th month Annual Wage Supplement (you all get it in your computer printout with your allowance), 2 months of Annual Variable Component, 2 months of tax free car allowance, imputed income tax on this car allowance which does not apply to non-Ministers, plus an estimated 4 months of Performance Bonus. This total remuneration is not an automatic flat payment. A significant part, about one-third, is conditional because the Annual Variable Component goes up or down depending on the state of the economy and it can be reduced or cancelled in a recession. And we deliberately move to follow the market. It means, for Ministers, that the Performance Bonus can vary between 0-6 months, depending on the PM's assessment of a Minister's performance. Ministers are not equal. We do not come through sausage machines. Ministries are not equal.”
“A first class pathologist, or haematologist, or paediatrician earns less than an average gynaecologist or a surgeon. They all pass through the same medical school. Why? It is supply and demand. To be a surgeon, you need very good dexterous fingers, quick mind. I had this explained to me by our former Speaker, who was a good friend of mine, why not every doctor can be a good surgeon and why some people should be forbidden from being surgeons at all because they are butchers. So I ask myself: why do people then want to be a pathologist, a haematologist or a paediatrician? Is there any justice in this? You get this argument in the university and it goes on interminably. I had it over the last 30-odd years and I am tired of it. If you pay that for a Professor of Gynaecology, you pay me the same because I am a Professor. I am a pathologist. But what is the opportunity cost? You can go. I will look for another pathologist. I can get him anywhere. All the chap has got to know is some pathology and the students will pass. Anyway, young women and their husbands will pay for a good gynae-specialist. That is all. It is as simple as that. Kandang Kerbau Hospital has seen a tremendous drop in patients. Because they are young, they've got their Medisave, they choose the best. I am not sure it is wise but that is their choice. So there is really no abstract just or fair relationship between ability and rewards. The real relationship is between supply and demand for these three specialists. And when the economy goes wrong, as it is during a transition in China, a taxi driver or a barrow boy selling fruits or chestnuts earns more than a university professor.”
“Supposing Boris Becker had been a table tennis champion, instead of a lawn tennis champion, would he have earned half a million dollars? Where are the followers? The followers are poor people with low incomes in China and Southeast Asia. The viewers who will buy all these beautiful branded goods are in America, Europe and Japan and they do not want to watch table tennis. You see two chaps prancing around and you cannot see the ball. Nobody wants to pay you any money for the TV rights. Lucky if you can make $50,000. It is the supply and demand for tennis players that determine the winnings of champions and the winnings that they make, in turn, decide the supply of new champions. And because the rewards are so great, all the top athletes in Europe, America, Australia and New Zealand aim to be tennis champions, not ping-pong champions, or gymnasts. There is a constant flow of them and they come in younger and younger, faster and swifter, because they have been sucked into it by the enormous prizes you get when you reach the top, and they spend prodigious efforts to get there, to satisfy the millions of tennis fans in the wealthy countries. Supposing China became wealthy and they still like ping-pong, then you might get people wanting to be ping-pong champions. But I have a feeling that when China is wealthy, they will also go in for tennis which costs more than ping-pong. So in the same way for soccer, or golf, and one of our Ministers, who is connected with football, said to me, "Ah, Fandi, we pay him $100,000." That, for Singapore, is a very big prize. But he said it is worth it because he brings in the crowds. If you want to understand the market, leave aside your moral values and ask yourself: Why did this happen? I take another example from doctors.”
“If you include his different housing, servant, food, travel and health services, then you may come up with a different equation. But anyway, the theory is, we will all wear Mao jackets. But let me tell you this. Some Mao jackets are fur-lined. One Minister who was travelling (this was before the kai fang zhengce ) said, "It was very cold." He said, "That's all right." He unbuttoned it, and inside it was fur. It was the same outside, dull blue or dull grey, but he was a comfortable man. Let me add when my education began. It was after I had to start to earn a living, not as an assistant in a firm where I was paid a salary, but when I became the employer and I had to pay the rent, furnish the office, hire clerks, get a library and worry about where the income was going to come from to pay for all these. Then I began to understand the law of supply and demand, and over time, I concluded that prices and wages and differences in pay are necessary if you want people to put in their best. I realised that fairness is a question of relativity. In the end, I concluded that moral values on pay are good only for textbooks on socialism and political tracts on social justice, in other words, when you talk about metaphysical things, not about the real world. Boris Becker, I watched him win the Wimbledon championship at the age of 17, that is umpteen years ago, and he earned in that one year from his prize money and his endorsements for tennis rackets, shirts, bands, shoes, whatever, more than $10 million, a bigger sum than any talented surgeon or lawyer in Germany would earn after many years of specialised training and experience. What sense does it make? Ask yourself, morally - what sense does it make?”
“I have been encouraging the Prime Minister to take a strong and realistic position on the pay of Ministers, judges and civil servants because they are all connected. You go up Superscale, then you go up staff grade, you go up to judges, you go up to Ministers. That is an escalation ladder. Then you end up with the President at the top of the pyramid. The decision, of course, is his, as it must be, because it is a politically important issue. His job is to ensure that for the next 10 to 20 years, in a very different climate, a different economic and social climate, the best will still join the Government, and not just for short periods, not one of these turn-around jobs where having made all the right friends in the right places, then you are off to run your practice with all the right contacts and private telephone numbers. Ministers have always been paid more than judges who, in turn, are paid more than civil servants. And you know a good lawyer naturally wants to be a judge rather than a Minister, and I know that. The higher pay for a Minister does not make up for the change in lifestyle, the publicity, the criticism and the demands of public office. Once upon a time, as a young undergraduate, I believed that vast pay differences between the incomes of professionals, bankers and the average worker was unjust and unnecessary. That is why I became a socialist. Some countries actually applied their moral value judgment and translated it into practice and decided that Ministers should not earn more than 25 times the lowest paid. And this was so in China, where Chairman Mao earned, in money terms, not more than 25 times the lowest paid worker in China. Of course, that is the money reward.”
“] Yet they departed with the president's praise.' says Mr Charles Peters. And he goes on in the third column: 'There has long been a shortage of qualified people in government, a deprivation that is now especially severe amongst Democrats, who have been out of the White House for all but five of the last 25 years. It is a grave problem in a society that has too long undervalued public service. Only during the New Deal and the New Frontier [New Deal was Roosevelt, New Frontier was John Kennedy] was there a major effort to bring the most talented citizens to Washington. [When you bring talented citizens to Washington, then you get an efflorescence, new ideas.] The result is that far too many of the people experienced in government are mediocre. The most glaring deficiency of Al Gore's "Reinventing Government" report was its failure to recognize this quality problem. [Al Gore, as you know, is the Vice-President.] According to the Volcker Commission [Paul Volcker was one of the top bankers who was in charge of the Federal Reserve at a very difficult time in the Carter and Reagan period.] on the Public Service, 90 percent of college honor students do not even consider a career in government.' In the American system, an honours student is someone in the top 5% of a graduating class, then you get either summa cum laude, magna cum laude, or Phi Beta Kappa, whatever it is. 90% would not even consider a government job. I mean that is how lowly paid it is, how lowly rated it is, and the country pays a price for it. They all want to be lawyers, or lobbyists. I think the problem is not going to go away and it is better for us to understand how the market works. Because once upon a time, I did not understand it. So forgive me if I assume that some of you may also not understand it!”
“Young men had come back, bright, able young men who had risen rapidly up the ranks in the war. People like Ted Heath had come back as Brigadier, Enoch Powell, Dennis Healey came back as Major, and their younger officers got scholarships or paid-for free university and wanted to emulate them. They wanted to change and build a better world and the best headed for politics. The second choice was the civil service and the top branches were the Treasury or Finance, and the Foreign Office. Today, I ask my friends who are now teachers at the University: what is the choice? This was a few years ago, and he said banking and financial services. The city of London first, because that is where the big rewards are, the big banks. Then the professions and the civil service. Politics is not the top choice. It is not among the top choices of the brightest and the best. More and more it is for the second best, for those who can talk their way out of their inadequacies, or think they can. There is a similar situation in America and I read this in yesterday's International Herald Tribune (IHT). It is the Op-Ed page, an article by Charles Peters, who is Editor of The Washington Monthly and he wrote this for The New York Times. He deplored a dearth of talent in government, and by this, he meant not just people who are elected to Congress, but people hired by the government. First column, second last paragraph: 'December began with the announcement that two senior members of the White House staff, Roy Neel and Howard Paster, were leaving for lucrative jobs in the private sector. Those jobs would permit them to cash in on their connections in a way the administration had once promised would not be tolerated. [Remember the last elections, none of these lobbying and cashing in on connections.”
“He had just come back from China and he praised the system where from top to bottom they all had the same free medical services. Those were the days when we believed what we were told, that everybody had the same medical services. Fortunately, the pragmatists carried the day and we avoided this. And we certainly would not have COEs, we would have traffic jams today. Nor would we have HDB homes for 90% of the population. No Permanent Secretary thought it out, no housing authority specialist thought it out. We thought it out. We were determined to do it because we had to have a national service army to fight, and nobody is going to fight for somebody else's Takashimaya, Ngee Ann City, or Cairnhill condominium. He must have his stake, and we created that stake. Now the Prime Minister has carried it forward with an asset enhancement programme, which means every surplus will be distributed not to finance expenditure but to increase your assets. And if you want to spend it, you sell it, and have the satisfaction of your consumption at the cost of diminished assets. You calculate. Would you spend it if it is your money and not the taxpayer's, meaning somebody else's money? We are giving it to you, spend it, if you will. And it is very instructive. When you give it to them, and it is theirs, a whole mental approach changes. If you look at governments around the world where the Ministers are weaker than their Permanent Secretaries, those governments lack lustre. When I was a student in Britain in the 1940s after the war, the first choice of the best graduates of my generation was to go into the professions and go into Parliament. The top students aimed for it. It was a glorious period in British parliamentary history.”
“Singapore needed Ministers who have the ability to make their way in this world, earn their living, and earn a good living, and be capable to take charge of a Ministry. And we must continue to select Ministers who are better than their Permanent Secretaries. Even when we cannot succeed for each Ministry, the Ministerial team, as a team, must be stronger than the Permanent Secretaries' team. Otherwise the creativeness, the boldness in making sweeping changes necessary from time to time to meet changing circumstances and to seize opportunities will be missing because the Permanent Secretary is, by his training and by his mental approach, someone who attends to the details and goes for incremental improvements. I will list the items which would never have happened without Ministerial direction. The practical bilingual system of education - it works. Many paid a heavy price in the early days when the system was pitched too high. Either you got too much Chinese or you got too much English. And those who had too much Chinese found themselves, after Nanyang University, with poorly-paid jobs. We had to bring about an answer to it, an answer which had to be politically acceptable. We would never have gone into independent or autonomous schools. No Permanent Secretary would want to think of it. It creates problems for him. Nor would we have restructured hospitals, nor would we be here with Medisave instead of a burgeoning medical services budget. I foresaw this in the 1970s and I blocked into Special Account 4%. That was the beginning of Special Account. We sat down, we discussed this, and said this was coming to us, let us not go in for this buffet syndrome. I remember one Minister, one of my colleagues, furiously disputing my policy.”
“And Singaporeans must resist a world trend of falling standards in politics. It is a world trend. By the 1980s I had decided that the British system would be more disastrous for Singapore than it had been for Britain. So I broke away from the old policy in 1984, when I increased Ministers' pay to 80% of their private sector counterparts at that time. I followed this up in 1989 when the Prime Minister, then as First Deputy Prime Minister, announced that the Prime Minister would have the right to pay a Minister make-up pay of up to 90% of his pay in the private sector. This was just to give myself scope in case I was unable to recruit men of quality, then I had to co-opt somebody right from the top to fill a job for three, four, five years, because I needed a top executive for a specific job in a specific time. Those of you who have watched the British TV series "Yes, Minister" and its sequel "Yes, Prime Minister" know that it portrays a popular, probably mistaken, view that any ordinary guy can be a Minister because the real job is done by the Permanent Secretary. The series exaggerates the real Minister-Permanent Secretary relationship in Britain. But let me assure you that in Singapore, such a series would not be funny. From the very start of Ministerial government in 1955, that was before my time, that was my first election to the Legislative Assembly at that time, and Mr David Marshall and then Mr Lim Yew Hock became Chief Ministers in turn, the British government recognised that the British system could not be reproduced in Singapore's different circumstances. We have no political class with inherited private incomes.”
“So what I am saying is a system that we worked in the 1960s and 1970s, we could no longer work in the 1980s, and they would be stupid if they did not make amendments, and sometimes radical changes, to meet the circumstances of the 1990s. I will recount to you what has happened to countries that do not make this adjustment, that make believe with the past. I know Britain best because we inherited our system from them and I spent so many years studying there, negotiating with them for our independence and having a lot to do with them even after independence. In their system they pay their Ministers a token. The practice was: you go into politics only if you have inherited private wealth, then you are a country gentleman, you can afford politics. And when you take office, it is for the honour of it, and honourable men sacrifice their personal interests for the sake of the nation. Of course, the sacrifice was never severe because of their private incomes. And there is a club, an informal network that exists in Britain's club land, that leads to the city, that leads to mutual benefits. Now, few in Britain have private incomes, and this has created problems for them. And their editorial writers and their city analysts write in despair of the quality of their Ministers. Three-quarters of them, sometimes more, they say, of their Cabinet, could not find a top job in a multi-national. They are just dismissed. They can do it, they can get away with it. It is a different system. It is well established. The country would not collapse. But Singaporeans are not in that position to take liberties with the system. We have to insist on honesty and competence in the men and women who take charge of government in Singapore. In other words, we must elect such people into Parliament.”
“[In other words, he does not want to engage anymore on this argument] For the record, I would like to assure Mr Tan that I do find a very strong sense of social purpose working at The Straits Times." This moved me to find out what brought about this high social purpose in the Straits Times. And the Straits Times paid the PSC $40,000 and the NUS $380,000 for uncompleted bonds. That is $420,000 plus $8.75 and $9.98. We will forget the balance. Let us round it off as $420,000 to buy his social commitment. I was curious. I said, teaching at the University, hundreds of young minds waiting to be moulded, shaping the future through the next generation of thinkers - that social purpose could not equal the higher social purpose of writing an article every other week in the Straits Times for the delectation of its one million readers every day? So I was mischievous enough to say, well, did he make a sacrifice for this? What was the last pay in NUS and what was the new pay in the Straits Times? And I was not surprised at the answer - it was part of the consumer society. So he is on his way to getting a golden credit card. But it is of the generation. SAF scholars tell me that every few years there is a shift in the values, the ambitions, the expectations of the younger SAF officers. They want it faster and quicker. And because the upper ranks are now being filled by fellow SAF officers, no longer the old regulars who are easy to replace, but people of the same calibre, the progression up is slower, and the attrition rate must be higher, and we accept that.”
“Much of the job satisfaction of high ranking public servants is derived from intangibles [you have only to breathe the fresh air and your children will be happy] such as a sense of social purpose, and the power to make policies affecting the lives of many. It is natural, therefore, that their salaries should differ from those of their private sector counterparts." Since the private sector counterpart does not affect the lives of many, they should be paid more. But since these gentlemen affect the lives of many, they should be paid less. I thought to myself, there is remarkable logic in that man. I wondered what the younger Ministers were going to do about this letter because John Chen was agitated enough to tell me. He said, "Do something." Then I read in yesterday's Straits Times the reply by the Public Relations Officer, Tan Eng Beng, from Ministry of Finance: "Dr Tan Kim Song ... criticised the large pay increases for ministers and superscale officers. He argues that "a sense of social purpose", not salaries, should be sufficient compensation for top public sector jobs." Then came this little thumbnail sketch of Dr Tan Kim Song, which I thought put it into perspective: "When pay is not competitive, not even a bond can hold officers. Dr Tan himself took a Public Service Commission scholarship, then obtained a doctorate on a National University of Singapore Overseas Graduate scholarship, but left within two years of completing his doctorate to join The Straits Times, which paid off the remaining six years of his bond." So the reply of Dr Tan at the end of the letter was: "I thank Mr Tan for the clarifications made, [not that the clarifications could be rebutted, but he just said "thank you"] and will leave it to the readers to make their own judgement on the matter.”
“I had this discussion with Lim Kim San over lunch the other day. As part of the old guard, he also expressed puzzlement at the way the world is going. Why do people consider monetary rewards so important now? I asked him, "If you were 40 and I ask you to fight in elections as I did in 1963, would you do so?" He said, "Well, that is different. Those were different times." So I put to him my argument why if I were 32 it may not be worth my while. His final rejoinder was, with all your holiday homes, and all your executive jets, you will not have the same satisfaction. I asked him, "What satisfaction does the younger generation face?" Mine is a legend. People believe that we get satisfaction. I have met some old guards who looked at me reproachfully and say, "Is this the reward for what you have done? A miserable pension which is not in keeping with inflation?" But I said, "You knew the rules." It is this that makes me understand. I went into this philosophical discussion because I am trying to understand this present generation, and the attitude I find contained in these two articles which I read in the Sunday Times and in yesterday's Straits Times. John Chen sent me an article entitled, "Look into poor morale of lower-income groups" by Dr Tan Kim Song. He was quite upset at the unsympathetic exposition of the Government's policy. I missed it and so he sent it to me. Dr Tan Kim Song's argument against increasing salaries for Superscales and Ministers was a very high-minded one. I read from his middle column: "Furthermore, as many have pointed out, the relative importance of monetary rewards diminishes as one goes up the ladder.”
“The nub of the problem is how to get a younger Lim Kim San, Eddie Barker or Hon Sui Sen to come out, fight the elections and take office. Indeed, if I were a young man of 32, all over again, the age I won my first election into this Chamber in 1955, I wonder whether I will choose to run for elections in today's climate and brought up in the last 32 years. What for? To face and satisfy a demanding and unappreciative younger generation for whom nothing is good enough? Why not a career in the law, specialising in corporate work coupled with a business which will come naturally, which can spread its wings and will spread its wings into the booming region: ASEAN, Myanmar, Vietnam and China. It can be a full and exciting life, with executive quality travel, plus the exhilaration of creating prosperity in the region, and sharing in its creation. I spoke to some Singaporean developers. They told me of the great hardships that they have to face to develop a housing complex in China. But at the end of it all, the most rewarding, because not only do they get a decent profit margin, but they see a higher quality of housing for the Chinese people and for their relatives overseas who buy these homes for them. Quite an exciting prospect, much better than building homes in Singapore. HDB gets no thanks at all. Probably, if all able men did likewise, who would run Singapore? What if Singapore comes to grief? But a smart young man will say, "Well, in that case, I insure myself with a fall-back home elsewhere in the region." You can buy a house in Perth for nothing. For the price of a 3-room HDB flat, you can buy a huge sprawling orchard with a nice building on it. Just toss it away, use it as a holiday home. After all, with wealth, the whole world is your home.”
“High growth brings high rewards. There is a different spirit of the times, or as the Germans call it, Zeitgeist, and it affects every part of Singapore, including its politics. Singaporeans want more. Ministers have children who, like other Singaporean children, also want more and better. To be a Minister is to take on the often thankless job of creating conditions under which people can get more. Yet we need some of our best to be in Government. And the way to get the best in Government in this generation, in these circumstances, is to pay them nearly their market value. When our GDP is growing fast and private incomes soar upwards, it is unrealistic to expect good men to sacrifice their families, not for one term, but for many terms and many years, just to make other people wealthy. Of course, conditions may change. But until they do, and I believe it will be many, many years before they ever do, we will jeopardise the continuing flow of talent into Government if we do not keep up Ministers' pay comparable to their private sector counterparts. Since the salary changes were announced in December for Ministers, several MPs told me of their grassroots feedback. It was a compliment to the old guards and an indirect rebuke of the young, that the old guards never linked their pay to that of top bankers and professionals. As one of the old guards, I must say that these grassroots leaders are harking back to a bygone age. Let us face it. Old guard heavyweight Ministers, like Lim Kim San, Eddie Barker, Hon Sui Sen, would they come out to serve Singapore today if they were in their 40s? They came out because Singapore was sliding into disaster. Those were different days.”
“I responded and said, "But they are still prepared to work for the more that they want." And he sadly replied, "Yes, that is no longer true in Europe." I am not sure whether the progression will lead us to that final stage where we would have arrived, where they want all these things and are not prepared to work for it. Mine was a different generation. We are almost like dinosaurs. There was no mass consumption society. People lived hard, frugal lives. To give a measure of the change, when I watch young kids with all the beautifully wrapped and packaged sweets and cookies in beautiful plastic bags, I think of the two cents of nasi lemak schoolboys, like me, had in school for lunch. Rice in banana leaf, and inside was a little piece of banana leaf with fish and chilly. Two cents. We experienced great privations when our world collapsed as the Japanese destroyed the British in a military defeat and occupied Singapore for 3 1/2 years. When the British returned in September 1945, we were in profound discontent. The Communists started an armed revolution in a grab for power. The British fought a rear guard action and thus allowed us, the non-Communists, to win. My colleagues and I had come together in the 1940s in London, determined to rid Singapore of the British. We found ourselves locked in mortal combat with the Communists in the 1950s. To survive, we had to fight and we had to be prepared to sacrifice our all, our everything. So we learned to live plain and simple lives, in order not to give hostages to fortune. We won. By the time we won in the 1970s, a plain and simple lifestyle had become a life-long habit. But my generation cannot reproduce ourselves. Even if we were cloned, our younger clones cannot be the same because the circumstances that tempered us have gone.”
“It will make your eyes brighten up. Your breath will smell fresher. You will dream better. But you need a credit card, a golden one. How do you become entitled to a credit card? Communist societies like China and Vietnam are going through the same transformation. They are in the earliest stages and you see it as you drive from the airport into the city. The billboards announce the arrival of the consumer society. They have not got those items yet - cameras, beautiful shirts, beautiful garments. As you drive in, you know it is on its way. Consumerism has come to Singapore. We have never experienced such a tremendous speed of change - incomes, homes, transportation, recreation and leisure and our lifestyles have all changed dramatically. When I read in the newspaper that a group of fishmongers now go regularly to Korea to do skiing, I ask myself whether the quality of the fish is as good as when I was a young boy. Obviously, the fishmongers are better! We are better off in every way than we were 10 years ago and beyond comparison with 30 years ago. Last month, Dr Albert Winsemius returned to Singapore after a lapse of 10 years. He has been associated with us since 1960. He stayed for two weeks. At the end of his stay, I asked him what was the most profound change in Singapore. He paused and he said, "They want more." This more than any change in the geography, productivity, education standards, they could not strike him so vividly as the constant refrain he got from the younger people he had met. They are disappointed that after five years they have not got a private house, a condo or a terrace house, that their car cannot be upgraded. And he told me he explained to them that he did not own a house until he had worked for 15 years. That was in Holland.”
“They have also disappeared. You can get them but they are different and you may be better off with Filipinas. Long settled and developed societies like Britain, for instance, used to recruit some of their best minds to teach in universities like Oxford and Cambridge, not through high pay but through high status and a gracious way of life that goes with it. A rural setting of a university town, bicycles, high table wines, beautiful food. This is no longer so. Even existing top British academics are being head hunted by the Americans, lured away during summer vacations to test out American campuses with superior research facilities, research grants, homes and salaries. Even the judiciary in Britain, once accepted as the final accolade of a top QC, is now passed by. Top QCs do not want to be judges. They cannot afford it because the government in Britain, faced with slow growth and demanding unions, has been unable to implement successive recommendations to up salaries and each time they had to cut down, because they wanted to cut down at the bottom too. If you want to keep teachers and nurses' salaries down, you cannot up salaries of judges and Ministers. Because there are few judges and few Ministers and many nurses and teachers, it was the sensible thing to do. You have only a few disgruntled judges and the Ministers can leave anyway and write diaries, but then you cannot get new judges or you get them in the second and third rungs, because salaries have woefully been out of touch with current incomes of QCs. In short, the consumer society has taken over all industrial societies and most of the NIEs. And the values of this society are materialistic. You watch the television and see all the good things that you must have. It will make you happy. It will make you strong.”
“What can be the reason for this? I am not a sociologist. I suggest the era we are living through is one of rapid change where old, established values are being undermined and challenged. It is the most rapid change the world has ever seen. Because science and technology bring in its train a continuing revolution in lifestyles and they affect fundamental values in all societies, but more profoundly in those of the developed industrialised West because they are into it deeper than we are. In these societies, religion is losing its hold. People no longer believe in God or the Bible. Indeed, the Archbishop of Durham questions the wisdom of believing in virgin birth and he is an Archbishop. Science and technology have made people question fundamental beliefs as to right and wrong. If there is no reward in heaven or punishment in hell for sins in this world, why not have a good time and get away with it? And that is the prevalent mood in the West. Churches have been converted into cinemas and discos. The priesthood is no longer an honoured or an honourable vocation. The Catholic church is unable to recruit enough new priests. And high-ranking Catholic priests in Ireland and in America have scandalised their communities by their immoral sexual behaviour. Some years ago, when I wanted the mission schools to take on a larger responsibility, I approached the various missions to see if they could not get the dedicated teachers that they had that gave these schools the sense of purpose and dedication. They could not find them. They could not expand even if the Government paid for all the expenses of a new school. A generation has disappeared. It is not so difficult to understand because we have tried to get new maids from China - the dedicated black and white amahs.”
“I was listening to BBC at lunch time and they were quoting what the newspapers were saying about the latest rumpus, not only the sexual mores not living up to a return to basics, but the rigging, or the contrived selling of council houses in Westminster in order to make sure that the voters are Tory and that they will have Tory seats. But it is not only in the West that governments get tired and tainted. In Asia, once revolutionary governments, like those in China and Vietnam, are also bedevilled by corruption and nepotism. And these are men who led very tumultuous revolutions and are still alive and in charge. What is perplexing is that the first generation Communist revolutionaries, men whose dedication and sacrifice were never in doubt, are still alive and in charge, some of them have allowed their children to grow up undisciplined. They use their powerful connections for personal gains and, worse, are unable to keep the system from becoming tacky. 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]. DEBATE ON PRESIDENT'S ADDRESS Debate resumed.”
“They will no longer be entitled to any medical benefits, but will receive the additional 1% of Medisave, a maximum of $70 per month, like other new recruits. The Public Service Division is satisfied that the salary revision coupled with the new medical benefits scheme leaves the vast majority of civil servants better off than before. But some serving officers believe that despite the salary revision, they are worse off with the new medical benefits than under the old terms. Therefore, although the Government is under no obligation to do so, PSD has agreed to allow civil servants the choice of staying on the old salary scheme plus the old medical benefits scheme. These civil servants will receive future salary revisions, like other officers, but they cannot expect the same increases as those who have converted to the new medical benefits scheme because they will receive more medical benefits than those on the new schemes. As I have said, the final test is the market. A wrong decision must mean resignations plus low recruitment. Mr Speaker, Sir, a younger generation of leaders has taken charge of the Government without any gears crashing. They are taking the PAP Government into its 35th year and as honest and effective as it was 20-30 years ago. This is no mean achievement. In Britain, after only 14 years of Conservative Government, the media and the opinion-makers are bored with the Conservatives, whose Ministers they dismiss as tired and worn out.”
“The Government recognises that serving officers have certain expectations of the medical benefits they and their dependants will receive, especially after retirement. The change is, therefore, smaller for serving officers than for new recruits. Serving officers will continue to receive medical benefits in kind, but with a higher co-payment. New recruits will be completely on a new scheme. They will get an additional 1% of Medisave, out of which they can buy medical insurance (MediShield) if they wish, and which will cover them for catastrophic illnesses. And the Health Ministry is working out MediShield II which will ensure that, if you buy MediShield I and MediShield II, you will be as well covered as if the old medical benefits obtained. They must, of course, bear all their in-patient medical expenses either through MediShield or Medisave or the new MediShield II. The Government will co-pay part of their outpatient expenses (including visits to private GPs) but only up to a maximum of $350 per annum. The figures are not capricious, they are not arbitrary. It has been worked out on what the average person would spend and it is revenue-neutral. We neither spend more nor do we save more. We have just given what we have been paying to the hospitals, to the Government officers individually. Retired officers, in other words, pensioners are not affected by these changes. To set an example, the President, the Prime Minister and Cabinet Ministers are being treated not like serving officers. They can, in all fairness, say that they are serving officers and therefore only newly-appointed Ministers will face this dilemma. They have moved themselves into the category of new recruits, therefore new scheme.”
“Furthermore, the old civil service medical benefits were introduced at a time - this predates me and it goes back to British days - when civil service salaries were low and they did not have to compete with the market because the largest single employer in Singapore was the Government, and the Government set the pace. They paid low wages and they gave benefits in kind, eg, subsidised quarters, transport, medical services, and even home leave pay for expatriates back to either Britain or India. Senior officers were given servants, drivers and leave passage. When we move towards market rates, we cannot move towards cash parity and also keep these benefits. They have to be trimmed. More important, benefits in kind, we know in this very cost-conscious age, lead to distortions and overuse. 16% of admissions to Class A beds in restructured and Government hospitals are by those with CSC cards, ie, civil servants and pensioners, and they are only 4% of that income group and they use 16% of the beds. In other words, because the payment has been arranged in this way, the user is four times that of the average population. It does not make sense. The changes that the Government is proposing are not going to save the Government any money. What is different is that the money, instead of being paid to the hospitals, will be paid individually to each officer and he decides whether he wants to go into Class A or B1, or whether he needs to go to hospital at all for such a minor complaint. It is his cash benefit. This will avoid the buffet syndrome which everybody knows. This is what happens at restaurants when somebody has paid for, or believes he has earned it, and he can take whatever he likes, often wastefully.”
“I know many civil servants, including my daughter and my younger son who have put in some 16 and 18 years of service already, are not happy that their medical benefits are going to be altered, and that they now have to opt, either to stay on the old scale and medical benefits, or take the new pay scales and co-pay a larger share of their medical expenses than before. Everyone, and I, if I were a young man in the service, would want the new pay scales and old medical benefits. But whether the offer is fair or not will be tested by the market. If it is unfair and not competitive, recruitment will go down, resignations will go up and there is no escape for the Government. We either offer something competitive or talent drifts out. We have decided that civil service salaries have to match market attitudes, which means immediate cash benefits, not deferred substantial service benefits in the future. Changes in Singapore's economy and the employment market compel us to adjust our policies. But to be competitive, the Government cannot freeze in perpetuity every single component of its benefits package. Morally, the civil servants can expect the standard of medical services prevailing at the time when they joined the service, that is, the kind of hospital, doctors, equipment available. The problem is that the Government cannot stay on these standards and not upgrade. Upgrading, however, requires adjustments, increased costs and, if we are to prevent wastage, co-payments.”
“This is not a new development. For many years, the Government has moved away from deferred benefits, like pensions and non-money benefits, like housing, quarters, leave pay, and so on, in order to match the market. As early as 1972, I agreed with Hon Sui Sen, then the Finance Minister, that we had to replace pensions with CPF for Division III and IV officers. Otherwise, we could not match the market. And if we match the market, then the pension is completely not in proportion with the services being rendered. He also urged me to convert Division I and II officers into CPF. I disagreed. I did not want to upset a long established system of keeping public officers in the service for long periods of time until pensionable age is reached. But by 1985, some 13 years later, the trend was irresistible and I had to agree. I decided I was old-fashioned and he was facing realities of the market. Because he was in charge of Finance, he had to meet the establishment requirements and the recruitment just was not there. I decided the tide was not going to change for a very long time. The younger generation then already wanted the rewards of the private sector. They were not interested in pensions and health benefits 20-30 years into the future. But I decided it was necessary to continue pensions for core officers of key services, where it was critical to have continuity and expertise and where it is difficult to induct talent from the private sector in mid-career to make up for officers who leave. This recent pay revision, together with the medical benefits revision, is another major step towards competitive market rates. It was a trend which I had to agree to in response to a different attitude, and expectations of that generation starting as early as 1972.”
“We are studying the possibility of introducing the ALS to other congested areas like Jurong, and in three to four years we should start to install the electronic road pricing to relieve congestion along specific roads at peak hours. These measures taken together will make it possible to increase the number of COEs available, but the increase is unlikely to be enough to satisfy total demand. One hallmark of a good government is its willingness to tackle problems which are over the horizon, before they become large and intractable, which is one reason why we are dealing with problems of the future. They could be postponed but at a price. But when it becomes impossible to avoid them, it also becomes impossible to solve them without grievous harm to the electorate and the Government. One important instrument of good government is the high standards it must have in the civil service. In an era of rapid growth, private sector wages inevitably move in tandem with the economy and Government wages inevitably have lagged behind. I have chosen to speak on this debate because the history of many of these problems lies in the past and their solutions were initiated in the past. The Public Service Division has established private sector benchmarks for the pay of civil servants in each major service, eg, the professional services, the executive service, teachers and the clerical service. We will peg the pay of Permanent Secretaries to private sector benchmarks, for instance, Superscale `C' will receive 70% of the average income of the second man in each of the six major groups of professionals, bankers, lawyers, engineers, accountants, MNC manufacturers and local manufacturers. The Prime Minister and his colleagues are studying the matter to decide the appropriate formula.”
“There are the Upgrading and Interim Upgrading Programmes for HDB blocks and these should be in full swing in two years. The Government's asset enhancement programme which the Prime Minister announced last August as our way forward, our road to competitiveness and high growth and fair shares, and not welfare, means that before April 1997, when this Parliament is to end, every Singaporean will have increased his assets through higher values of his homes, bigger POSB and CPF accounts, more shares purchased with his CPF, more share issues, PUB, PSA, SMRT, at special discounts. Of course, one nagging issue is the rising cost of COEs. If, as is likely, we achieve 6-8% growth per annum for the next three years, and incomes increase at the same rate, then by 1996, COEs at $60,000 would look quite reasonable. Three percent is the maximum increase at the moment we can have in any one year without jamming up the roads. Therefore the increase in the number of COEs is 3%; incomes up 8%, which means, as has been for the last two years, a three-fold increase in demand and a one-fold increase in supply. More and more persons who did not expect to own a car but with the increased incomes and rise in asset values, whether of HDB homes or CPF-bought shares, it means more and more people want to buy a car, and so prices of COEs must go up, because more people want to buy cars than there are COEs. The position can be eased but it cannot be completely solved. We can improve the road traffic system and the traffic control; we can fine-tune the system like converting unused COEs for motorcycles into COEs for cars. We have just started the whole day Area Licensing Scheme (ALS) in the Central Business District and it has shown promise.”
“Mr Speaker, Sir, in the last three years the Prime Minister and his younger colleagues have found their stride. This Government has found its rhythm and is keeping up a steady pace of economic growth and social change. Basic policies for health and education are in place. If we make adjustments of fees yearly following each NWC increase, we will avoid big increases every three or four years. However, people continually want better quality health and education services. This requires better qualified and so better paid health and education workers. Therefore people will have to pay more for the higher cost of better health and education services. Other items are in place, like GST which is set for April 1994. It will not cause lower income families to pay more because of the offsets already worked out. Those in the upper income brackets will get their income tax reduced and Singapore's economy will be better placed to meet future challenges. Members will have noticed that even the People's Republic of China has decided on GST or VAT (value-added tax) at 17%. Governments the world over recognise that they need this most cost-effective system. Our aging population with low birth rates will mean a slower growing economy in 15 to 20 years' time. We will not have enough young people to keep both the economy vibrant and to take care of the old. We have to begin solving this now by getting families who can afford it to have more than two children, and by selective immigration of people who can contribute to our economy, and by increasing also the CPF Minimum Sum. The significant change that will take place in the next five to 10 years will be the wealth or the assets of individual Singaporeans.”
“800,000 home owners, and you say that is crumbs?”
“There are vast differences in the prizes they award and the royalties that go with the first prize, as you sponsor shirts, rackets, tennis shoes, tennis bands, wrist bands. But what we do not see are the preliminary eliminations. They get prizes too. Otherwise, for every competition you may not get more than eight turning up, and you may find the same throughout competing to be the final eight. But there is a moral of reality in life for us, isn't it? I therefore ask him, even at this late stage: Does he really want to mock our urging the younger generation to respect their elders and look after them? Watch out. There may come a day when he will be grateful that his grandchildren had listened to us and respect him and have affection for him and visit him in his old age. Otherwise he may be left to Mr Wong Kan Seng's old folks' home, and that will be a tragedy which I would not like to visit on my worst enemy.”
“Individuals who have done well, who want to do something for their fellowmen, and we should use that. Not everybody has it in the same measure, and we have used it. You ignore that and substitute for the altruistic individual with that drive to do something for his fellowmen, a bureaucracy, and you have got corruption, inefficiency, and failure. It has happened over and over again. Do we need to learn all over again when we can see what happened to the British and the Australians? They went in for compassionate welfare programmes. They paid their unemployed almost as much as the employed when they lost their jobs. They had the right to refuse three or four jobs until the right one came along, commensurate with what he was getting the last time, to his liking. The result was the layabouts. So finally the Australians gave up, and a Labour government in Australia has struck down unemployment benefits. If we do not learn from other people's errors, costly errors, we would be ruined, wouldn't we? We have got very little margin to spare. I take this advantage, not because I believe Dr Lee will influence a younger generation of Singaporeans, but just in case there are the few errant minds, to remind them where we would have been if we had pursued the policies he advocated. I am proud of the ethos with which we have infused a younger generation of Singaporeans. We have given them the chance to stand up, be self-reliant, and be enough of a team, of a nation, so that all can perform at their best, and the whole group, including the losers, will not perish. And that is achieved by going with human instincts, going with basic culture, and making adjustments along the way for those who would otherwise lose. Watch any tennis tournament. There are vast differences in ability.”
“Lenin and Stalin tried to. You are too long, they chop you down. The end result is total misery. They tried it in China, it has failed. They tried it in Vietnam, boat people. In North Korea, it is a total devastation. Let me take a few instances. Even in the capitalist West where they have tried throwing money at problems, what is the end result? You go down New York, Broadway. You will see the beggars, people on the streets. Worse than in the 1950s and in the early 60s before the Great Society programmes. Why? Why did it get worse after compassion moved a President, motivated with a great vision of a society which was wealthy and cared for, could look after everybody - the blacks, the minorities, the dispossessed, the disadvantaged. There is more unhappiness and more hardship today and more beggars, more muggers. Why is that? Have we not learnt? Where are the beggars in Singapore? Show me. I take pride in that. Has anybody died of starvation? Anybody without a home left to die in the streets and have to be collected as dead corpses? Because we came to the realistic conclusion that the human being is motivated by instincts that go deep down into the basic genes of life. And the first basic instinct is to protect yourself, and stronger than that, to protect your offspring so that there is the next generation. You kill that link, you have killed off mankind. They half killed that link in China by removing the children in the communes (or children from the communes) from parental control, and disaster followed. We went with the instinct of the individual. Not all can perform in a free and equal society. Free chances, there will always be the losers. And there is the altruistic streak in society.”
“Mr Deputy Speaker, Sir, the divide between Dr Lee Siew-Choh and me is an unbridgeable one, although we originally had him as part of the PAP. And it stems from a fundamental difference in approach to life and to society. We were both idealistic enough to believe that in a more compassionate world with equal opportunities, there would be less poverty, less misery, more opportunities, more prosperity. That is why he joined the PAP. He then went in for utopian politics. He believed in the communist (socialist credo) that all men should be made equal and be equally treated and equally rewarded. Once upon a time, in the 1950s, many Singaporeans, especially the Chinese- educated, believed that China was a stupendous success in instant revolution and industrialisation, arising from glossy magazines and brilliant broadcasts of production figures and spick and span showpieces for distinguished visitors to be taken to, children's palaces, model factories, model villages. 4.15 pm I believe the majority of young Singaporeans or young Chinese in Singapore in the 1950s would have voted for that system. That is the danger of one-man one-vote. It was a mirage. It was a con job. We knew it only in the 1970s and it became obvious to everyone in the 1980s. After all these years, I pose this one simple question to the Member: 70 years in the Soviet Union of the egalitarian society, have they banished beggary, prostitution, misery, hunger? Is that the way, to suppress the individual instinct to perform, to excel, to be better than the other, to get better rewards, bigger prizes, to increase his family's chances in life, so that they can have a better kick-off? All that was stifled with the objective of an equal egalitarian society. God did not make the Russians equal.”