Stephen Lee Ching Yen
Singapore
“I would like to ask the Minister to consider some means to help employers defray part of their higher cost associated with the extension of retirement age. One suggestion is to explore possibilities of tax incentives, eg, double tax deduction as a means to help companies defray these higher costs.”
“We cannot continue to bemoan the fact that companies do not train while at the same time allow them to engage foreign workers in large numbers. Companies have a responsibility to train Singaporeans to provide them with skills to upgrade their productivity and operations and to reduce the reliance on foreign workers.”
“Therefore, if we use the price mechanism to control a factor of production which does not react quickly to price changes, the price control is not very effective to fine tune the demand curve. Then we get lured into the false impression that the market is prepared to pay this price and there is room indeed to increase that price.”
“Sir, does the Minister agree that even before corporatisation PUB was already very efficient? Since corporatisation, have we seen substantial improvements or do we expect to see substantial improvements? My second question is on the gearing.”
“Sir, I beg to move, That the sum to be allocated for Head S of the Main Estimates be reduced by $10 in respect of Code SD 1500. Sir, I shall be very brief. The Singapore Employers' Federation has feedback that many employers are cautious about hiring older workers past 55 years of age.”
“He gave the example that visiting seamen who used to purchase large quantities of electrical goods have stopped because they cannot get GST refund when they leave by sea. This electrical appliance business is very price sensitive. Another major outlet is the causeway.”
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“I would like to ask the Minister to consider some means to help employers defray part of their higher cost associated with the extension of retirement age. One suggestion is to explore possibilities of tax incentives, eg, double tax deduction as a means to help companies defray these higher costs. Lastly, I would like to thank the Minister and his staff for all the assistance in the rounds of briefing employers on the amendments to the Employment Act.”
“Employers should therefore, in discussions with unions and workers, restructure these packages to suit their workers as well as the company's needs so as to keep competitive. Next, I would like to turn to the issue of retrenchment benefits. Our current formula is related to years of service. Many employers feel strongly against extending retrenchment benefits to beyond 60. Companies undergoing restructuring will have to bear a heavy cost if they need to retrench older workers who would have retired at 60. Indeed, some employers are questioning high retrenchment settlements even for workers below 60. The quantum of retrenchment benefit, in my view, should encourage the worker to re-enter the workforce as soon as possible. It should not be so large as to put him off for a long period of time. Many employers feel that there should be a reasonable cap on the maximum retrenchment benefit payable. In an age of global competitiveness, our labour market must be flexible. Otherwise, both companies and workers will lose out. Sir, the retirement age was last raised in July 1993, from 55 to 60. I urge the Minister to give both employers and workers a few more years from now to adapt to the necessary changes before we next move to beyond 60. We should move slowly and cautiously in order to avoid any unintended rigidities, especially if there is an economic downturn. Moves beyond 60 should be made in small steps, with time in between each step to let the market adjust fully. Another safeguard that we can build in is interim reviews between steps. Employers in the near future will take on the responsibility of providing longer employment.”
“Sir, employers support the principles of extension of retirement age beyond 60. However, in raising the retirement age to beyond 60, we must be mindful of maintaining our competitiveness. Employers have serious reservations about cost increases this will bring if no changes are made to the terms and conditions of employing workers beyond 60. When I say "workers" here, I include managers as well. Our present wage and benefits system is largely seniority based. Many older workers are paid much higher wages compared to a younger worker with similar capabilities and responsibilities, rendering themselves vulnerable to replacement. By 2020, 23% of our population will be 60 years and above. The cost of maintaining a significant portion of older workers in employment can be a heavy burden. With the exception of a small minority of jobs, work performances of average workers will decline after a certain age. This decline is likely to accelerate after 60. It is unrealistic for the average worker to expect to work till 67 at the same pay and benefits. Workers at 60 must be prepared for reductions to their total remuneration package for the sake of their own job security. Accompanying this reduction in remuneration, there should be a corresponding reduction in workload and responsibilities. If we take Japan as an example, workers at 55 take an average of one-third cut of their annual remuneration package in return for continued employment. These cuts usually come with some reduction in responsibilities. Some older workers on their own may want a different package. They may want to work less hours or they may want less responsibilities.”
“We cannot continue to bemoan the fact that companies do not train while at the same time allow them to engage foreign workers in large numbers. Companies have a responsibility to train Singaporeans to provide them with skills to upgrade their productivity and operations and to reduce the reliance on foreign workers. I therefore suggest that the Ministry of Labour work with the Skills Development Fund to come up with some workable schemes that would link foreign worker dependency to enhancing the skill assets of Singaporeans. The additional availability of foreign workers can give some relief to encourage the release of Singaporean workers for training.”
“Mr Speaker, Sir, this year's Budget has many give-aways, but the Budget could have done more for skills training. In the same way that we are faced with space constraint, we are faced with a very limited workforce. We need to help and encourage every Singaporean to realise his or her full potential in terms of what he aspires to achieve for himself. Singaporeans can only do so if they keep their knowledge and skills updated to match the demands of the changing workplace. With the support of the Skills Development Fund, more and more employers and workers are becoming involved in training. I am glad to note that we are likely to achieve the national target of spending 4% of payroll on training this year. However, this achievement hides the fact that small companies, on average, spend less than 1% of payroll in training. Such companies employ more than half a million workers. In such companies, there is little motivation for training. There may be a need for some incentives for workers to look after their own skill improvements. According to MTI's annual economic survey, over 100,000 jobs were created last year. However, the majority of these jobs were in the low productivity sectors. I suspect at least half of these jobs were filled by foreign workers. These were the jobs that require little skill and education, and such jobs do not help in our economic upgrading. Perhaps we should consider linking the training of Singaporeans to the need for unskilled foreign workers. Employers who need foreign workers should be encouraged to train up Singaporeans, to help them to improve the productivity of their operations. The dependency ratio for foreign workers could perhaps be raised in the meantime while they are training Singaporeans.”
“Therefore, if we use the price mechanism to control a factor of production which does not react quickly to price changes, the price control is not very effective to fine tune the demand curve. Then we get lured into the false impression that the market is prepared to pay this price and there is room indeed to increase that price. I hope that the Government will look at the combination of fiscal and other measures in the allocation of scarce resources in order to contain business operating costs at a reasonable level relative to our capabilities. Can the Minister consider reducing the foreign workers levy by half and combine this with the quota system to control the number of foreign workers? This is just as effective as the present system and it will go a long way to reduce the cost of operation for a large number of companies who use foreign workers.”
“Sir, the three speakers have already stated the state of the high cost in Singapore. I would just like to add that the Government has put in place a number of fiscal measures in the allocation of scarce resources like COEs and foreign worker permits. The Government explains that they are not after the revenue but they need to control cars and the same rationale is presented in the case to control the number of foreign workers. Whereas it is difficult to fault the Government on specific schemes and we understand the need for such controls, nevertheless, the cumulative effect of the schemes exerts a very heavy financial burden on companies operating here. I would like to take up the issue of the foreign workers levy. The Government has put in place the price mechanism to limit the number of foreign workers. The principle of using market forces or market price to allocate scarce resources is difficult to argue against. There is, however, a very important assumption that demand is an elastic one, one that is sensitive to price changes and will react accordingly. Now let us examine whether this is the case in foreign workers levy. The demand for foreign workers is a demand that may not be very sensitive to price changes within a reasonable range. For instance, you build a hotel or you set up a factory and you need 300 workers. Once the investment is in, whether the levy is $350 or $450, you are not likely to be so sensitive in the short run or indeed in the medium run. As long as the foreign workers levy is not prohibitively high, the demand will remain fairly constant given a steady economic growth. With our export-oriented and open economy, the need for workers is led more by external demand rather than determined by the price of a levy.”
“Sir, can the Minister enlighten the House whether or not the Government plans to continue to extend the interest-free loan to SP or whether this is an interim measure and, if so, for how long?”
“Sir, does the Minister agree that even before corporatisation PUB was already very efficient? Since corporatisation, have we seen substantial improvements or do we expect to see substantial improvements? My second question is on the gearing. If SP is now asked to gear to one-third, who are they borrowing from and what sort of interest rate do they have to pay and what impact does this interest have on the bottom line?”
“This will help to allay any possible fears and ensure that the process of corporate restructuring is smooth and not long drawn. Secondly, let me turn to the guidelines on part-time employment. The Ministry of Labour in its attempt to encourage part-time employment had in August 1989 introduced guidelines on part-time employment. These guidelines provide the flexibility to pro-rate certain benefits and the encashment of annual leave and public holidays in the form of higher wages. Employers have found these guidelines to be helpful and practical. However, since these are administrative guidelines, they cannot be enforced by the Ministry of Labour. I therefore welcome this move to have the guidelines formalised as regulations under the Employment Act. This would help to spell out clearly the rights and obligations of employers and employees to facilitate part-time employment. I hope that this would encourage more employers to recruit more part-time workers to address their labour shortage problems. Mr Speaker, Sir, I support the amendments to the Employment Act. I believe they will help to remove rigidities and ambiguities and keep the Act relevant in the changing environment of the labour market. In concluding, let me commend the Ministry of Labour for setting up the Tripartite Review Committee which led to the formulation of the amendments before the House today. They therefore reflect the consensual view of the tripartite partners. 2.47 pm”
“Mr Speaker, Sir, the amendment before the House today is to update the Employment Act and to remove provisions in the Act that give rise to rigidities in the labour market. I rise to support the amendments as they will help to ensure that Singapore keeps pace with the changing needs of the employers, employees and the economy. In particular, I would like to comment on two key areas of review, namely, the provisions for company restructuring and part-time employment. Firstly, company restructuring. The business environment today is characterised by rapid product changes, customer-driven environment and intense global competition. Enterprise needs to be nimble and agile to respond to the challenges of the market. It is especially true for a small and open economy like ours. Employers should be free to restructure and to determine the appropriate organisational structure and the size of the workforce needed for the enterprise. The interest and welfare of employees should at the same time be protected in the process of corporate restructuring. Setting up of a legal framework to regulate the transfer of employees in a company restructuring helps to achieve these objectives. The rights and obligations of employers and unions have been spelt out more clearly under the amendment to the legislation. An important principle of the amendment is to preserve the continuity of the period of employment of the transferred employees. The amendment also requires the transferor to inform and share relevant information which could affect the employee. It is important that unions and employees be properly informed of the rationale and features of corporate restructuring as soon as possible.”
“I beg leave to withdraw my amendment. Amendment, by leave, withdrawn.”
“Sir, I beg to move, That the sum to be allocated for Head S of the Main Estimates be reduced by $10 in respect of Code SD 1500. Sir, I shall be very brief. The Singapore Employers' Federation has feedback that many employers are cautious about hiring older workers past 55 years of age. Employers are not clear whether they have to keep these older workers until they are 67 years old. I would like to ask the Minister to clarify the position on the hiring of older workers in this interim period of raising retirement age.”
“I would also like to highlight that many jobs require age-related attributes, such as eyesight and manual dexterity. The performance of older workers will be affected by their advancing age. In such cases, the employers will have to redesign the job content or redeploy older workers to ensure his continued employment in the company. The ideal situation is to increase employment opportunities as well as wages but, sometimes, it may not be possible to have both, as experience elsewhere shows. The Government, labour and management should therefore think of employment opportunities, job security and wage as a whole package. Ultimately, employment and wage growth come from the international competitiveness of Singaporean companies. To maintain cost competitiveness, employers must be given the flexibility to adjust the remuneration package of older workers, including a cut in the salary and benefits. Uncompetitive wage structure will not only affect the viability of our companies but, ultimately, also the job security of our workers. The maintenance and enhancement of our international competitiveness must, therefore, be the primary concern of employers, unions and Government alike.”
“Sir, the Retirement Age Act came into effect on 1st July 1993, extending the retirement age to 60 years. The Act also provides for the retirement age to be raised further to 67 years. The move to raise the retirement age beyond 55 years is a necessary one. Employers fully support this move. Both employers and workers are now adjusting to the fact that five more years have been added to their working lives. Issues such as training, the ability of older workers to cope with changes have now become more important. Time is needed by both employers and workers alike to adjust and respond to these challenges. I urge the Minister to give employers and workers more time to adjust. I would also like to ask the Minister if there is anything that the Government will do to promote the `general acceptance of older workers' at the workplace before making another raise in retirement age. I urge the Minister to incorporate more flexibility as we raise retirement age further. Not all jobs are suitable up to the age of 64 and less to 67. We should learn from each raise before we move to the next level. I am gratified that the Minister has acknowledged employers' concerns about higher labour costs by lowering the employer's CPF contribution rate for workers aged 55 to 60 by five percentage points. When the retirement age is raised beyond 60 years, there will be further implications for workers and employers. One such implication is the cost of retaining older workers until 67 years. Our salary structures are still very much seniority based. Medical costs will increase as the incidence of serious illness is likely to go up with age. These are only some of the cost factors that the employers will have to bear with.”
“I hope the Minister can inform the House of any specific effort and incentives by Government to further encourage the training of older workers.”
“Many Members of this House who have spoken have expressed their concern about the training and retraining of our workers. I am particularly concerned about the training and retraining of our older workers, especially when the Government intends to further raise the retirement age beyond 60 to 67. According to the 1994 Labour Force Survey, there are about 136,000 workers who are aged 50 and over with only primary education and below. This group of workers forms about 8% of our workforce. Employers will face difficulties in training these workers. I fully agree with the Member for Leng Kee that the Government, employers, trade unions and employees should put up a concerted effort in training to help Singapore maintain its competitive edge. On the part of employers, they should be willing to invest in the training of workers both young and old. On the part of the workers, they may need to make some sacrifice to attend training provided by employers and trade unions and workers should be prepared to work closely with the employers and respond to training. They may have to sacrifice some of their evening hours to attend training courses. The Government needs to be more responsive to the training needs of older workers and on-the-job training. There is a need to be flexible when it comes to certifying their skills. Such workers cannot follow the full off-the-job curriculum on training institutes. They should be encouraged to continue to acquire higher skills through the national OJT skill certification system. The SDF could also examine how to better finance OJT. Employers need to invest a lot of their resources to embark on a structured OJT and a refinement of the present funding for OJT may be needed.”
“Sir, the Finance Minister in his Budget Statement announced that funds will be allocated to the Economic Development Board for venture capital funds to assist local SMEs to take advantage of regional opportunities. The Minister also said that funds will be made available for the EDB to make strategic investments and to assist local SMEs through various economic development schemes. I hope that the Minister can provide more information on these schemes and whether any new types of assistance will be offered in the new fiscal year. Many SMEs are also members of the employer groups. For example, of the 1,200 companies who are members of the Singapore National Employers Federation, more than 400 companies or about 35% employ less than 50 people. Will the Government consider giving grants to employer organisations if they can come up with specific assistance schemes for their members? These employer organisations might be in a better position to help their members if they were supported in their efforts by the Government. Moreover, the Government need not be burdened with more people to carry out these schemes.”
“May I seek clarification, Sir? The Minister mentioned there are two power generating companies. Are we compromising economy of scale and will these two companies effectively compete with each other?”
“He gave the example that visiting seamen who used to purchase large quantities of electrical goods have stopped because they cannot get GST refund when they leave by sea. This electrical appliance business is very price sensitive. Another major outlet is the causeway. I think these are some examples of the unintended fall-outs of the GST. The Government should review the GST refund to visitors. The Government may wish to consider point-of-sales refund together with lower qualifying minimums or, short of that, the setting up of more GST refund counters at departure points outside of Changi Airport. Sir, with these comments, I join my other Parliamentary colleagues in support of the motion.”
“In 1994, there was a reduction in the property tax for industrial, commercial and let-out residential properties by one percentage point from 16% to 15%. In his 1995 Budget Statement, the Finance Minister has reduced the property tax by 2 percentage points to 13%. The Government strongly encourages landlords to share this reduction in property tax with their tenants. However, we have feedback from the Singapore Retailers' Association that not many landlords are sharing this reduction with their tenants. Can the Government consider incentives that can impact retailers more directly? It has been a year since the introduction of GST which was implemented very smoothly. I would like to congratulate the Government for its efficiency. Now is perhaps a good time to review and fine-tune the GST system. One area that the Government can assist the retail sector is on the refund of GST to visitors. At present, we only refund GST at the airport for purchases of $500 or more and this has to be on one single receipt. This is not very shopper-friendly. For instance, I draw the comparison with Japan. In Japan, any purchase, except food, of 5,000 yen or more, which is about S$80, can receive cash refund immediately at the point of purchase. This is much friendlier to shoppers. Visitors need only surrender the receipt at the point of departure and subject to the occasional check of merchandise when requested. Other European countries give cash refund to tourists at different points of departure when presented with receipts. Minimum purchase to qualify for refunds is also lower than our $500. A major local distributor of electronic goods has told me that their sales have declined since the introduction of GST.”
“But we have to be concerned about our local SMEs. Are they keeping pace with the national growth performance or are they falling behind? How are the SMEs performing in terms of productivity gains? From feedback, many SMEs are facing difficulties in regionalisation. Problems like insufficient funding, lack of know-how to regionalise and operating below optimal scale are some of the problems. This is in spite of the many schemes that the Government has implemented through agencies like EDB, TDB, etc. Coordination among the Government agencies assisting SMEs have improved since the Economic Report of 1987. However, pressures faced by the SMEs have also intensified in recent years. Apart from the tight labour market and their difficulty in recruiting workers, and the increase in business cost, regional competition has also increased, adding to their woes. Local SMEs need more than incentive schemes. They need the combined assistance of agencies like the EDB, TDB, NPB and SISIR to upgrade and compete effectively. Can we not rethink about an old suggestion of a one-stop centre to help our local SMEs? I am not suggesting that the Government set up another large statutory board to help all SMEs. Perhaps some parts of the existing agencies could be restructured and some of their relevant departments regrouped to form a unit to provide coordination and strategic assistance to those SMEs that are vital to Singapore. The Ministry could give direct grants to this unit which could then be held accountable for the overall assistance to local SMEs. Now, let me turn to my last point which is the retail sector. This particular sector is very hard hit and is fighting for the same and limited domestic market.”
“I am heartened to hear Finance Minister's recognition that the use of fiscal measures to allocate scarce resource may have resulted in some unintended cost impact and that the Government is studying possible changes to its fiscal policies to make the economy more competitive. The unleashing of free and unbridled market forces can lead to excessive competition for a scarce resource in the short term. This happened in earlier years of the textile quota bidding leading to the weakening of the industry. I hope that the Government will look at a combination of fiscal and other measures in the allocation of scarce resource in order to contain business operating cost at a reasonable level relative to our capabilities. To help contain operating cost for Budget Year 1995, aside from the increases already announced, eg, the water conservation tax, the Government should hold any pending increases in public sector fees, charges and levies. I would also like to suggest that as much as possible, for future financial years, all intended increase in public sector charges and levies should be announced in the Annual Budget Statement. So businesses can in turn control their own budgets more accurately. Increases outside the Budget should be kept only to unforeseen and unavoidable circumstances. I now go to my second point on local SMEs. Singapore's economy has performed well in 1994 led by the manufacturing sector whose 12.9% annual growth and 11.4% productivity growth are the best in recent years. A survey of industrial expectations by the Ministry of Trade and Industry recently indicates continuous strong growth in the manufacturing sector in the first half of 1995. Overall productivity growth of 5.3% last year was also much higher than those of previous years except for 1993.”
“Mr Speaker, Sir, first, let me congratulate the Finance Minister for a prudent Budget, a budget that is designed to keep Singapore on track for further growth in 1995, the coming out of two consecutive years of double digit growth in 1993 and 1994, the prospects for 1995 are good, the external environment is expected to remain favourable, albeit a slower growth in the USA. Our ASEAN neighbours are likely to register robust growth. The Singapore economy is expected to continue to grow at 7.5%-8.5% this year, higher than our long-term sustainable growth. In short, our economy is in good shape. However, I have some concerns. I have three points to make this afternoon. Point number 1, to hold business costs. With two years of good growth behind us, our domestic cost pressures are intensifying. Rentals for office and industrial space are on the rise. The labour market will continue to tighten this year which will increase upward pressure on wages. Coupled with higher interest rates and the dramatic strengthening of the Singapore dollar, this will have an impact on the cost of doing business in Singapore. One example is our cost for industrial space is now the highest in the region including Hong Kong. This is a reversal of the situation of two years ago. The main cause of this is the slump of the Hong Kong property market and the strengthening of the Singapore dollar. The Singapore dollar has strengthened more than five percentage points against the US dollar in just the last six months. Whereas I support the need for a strong Singapore dollar to maintain investor confidence, I worry that our dollar may be going up too fast too soon. The high cost of doing business in Singapore is the most talked about problem among the business community today.”
“There were very, very few, if any, in the private sector who have the understanding and a good grasp of the macro economic issues we were faced at that time. We had no time. We had to act decisively, and with the strong leadership and collective effort, Singapore was able to pull out of the recession in a relatively short two years. The main point that struck me here is the key question. Are the two sectors so comparable and interchangeable that we feel comfortable enough to index the pay of one to the other? The public sector works on a longer time-frame and with different objectives than the private sector. The public sector is not subject to nor should it be subject to the pressure of short-term reviews by shareholders, as in the private sector. Yesterday, Mr Bernard Chen spoke on the accountability of the public sector versus the private sector. I agree that the public sector accountability can be improved. But I am afraid that it can never come close to that of the private sector because the two sectors are structured differently and have different objectives. We must recognise these basic differences between the two, yet comparison between the two is inevitable. Therefore, in setting linkage between the two sectors, it must be done with a fair bit of flexibility and at a more modest and convincing level. I support the linkage with the private sector but I caution against the rigid indexing or a mechanical linkage, especially in the case of the 15P32. 4.04 pm”
“The criticism, put plainly, is that the public sector wants to match private sector pay but with considerably less risk. Some Members here may not agree with this perception but the feeling is strong among the private sector. Calibre and academic excellence by themselves are not sufficient to guarantee success in the private sector. Rather, qualities like resourcefulness, tenacity, the ability to size up business opportunities and act quickly, together with an element of luck, are often more important in commercial success. The climb up the corporate ladder is often seen as a slippery and treacherous one. Even after reaching the top position, a CEO can, through no obvious fault of his own, find the table turned against him through a boardroom battle, or a hostile takeover. Such risks do not exist in the public sector. Over a dinner conversation a few days ago, a private sector CEO reminded me of the 1985 recession. By conventional private sector wisdom, when a company plunges from relatively healthy results one year to negative growth the next year, heads will roll. But this did not happen in the public sector in 1985. Having been personally involved in the aftermath of negotiating wage freeze and severe wage restraint, I disagreed with my CEO friend quite strongly that heads should roll in the public sector. I think this would be a minus imposition of private sector practice on to the public sector. We were in the most serious economic crisis in 1985. Workers were losing their jobs and for the first time in a long time, we had an actual unemployment problem. If we were to sack all our Economic Ministers at that time, are there any from the private sector to replace them? I think we would be very hard pressed.”
“This may have its impact on the private sector which may want to keep wage relativity. For one thing, this will up the barrier price for senior public officers to move to the private sector. But this price increase may not necessarily slow down the movement, which is more a function of increased demand due to a buoyant economy, regionalisation coupled with a limited supply pool. For as long as the economy stays buoyant, the private sector will continue to pay to hire. The public sector will find itself falling behind in pay, especially with the two-year time gap on IRAS returns. The public sector will then respond with a hefty adjustment, and then it starts all over gain. The private sector works on a much shorter time frame than the public sector but wages, once up, are very difficult to bring down. We do not want to get into the situation of the blind leading the blind and collectively we become less competitive. The White Paper was not explicit on how the benchmark would work. But through yesterday's discussion, I get the feeling that the 15P32 benchmark will be followed quite closely on an annual basis. If this is the case, I must caution against a rigid index. The CEOs' reaction to the Ministers' pay is, however, quite different. They are less concerned about the impact on the private sector, primarily due to the small number of Ministers involved. But they were more interested to guess who were in the top four. There are a number of unhappy bankers out there. I have yet to talk to the 32-years age group. The major complaint from the private sector, I think, stems from its inability to reconcile the risk/reward formula between the private and the public sectors.”
“I think there is a case to enlarge the sample size for reasons of stability, less turnover within the sample and increase accuracy. Let me now turn to the benchmark for Superscale G. I have more concerns here. It is arguable whether a good Administrative Officer will easily rank among the top 15 in his cohort in terms of ability. What is more important, I think, is whether the Superscale G officer's job has the same level of responsibility and authority compared to those in the cohort in the private sector. What are the jobs in the private sector that these 30-34 years old hold? Are we looking at CEOs or divisional managers as well as partners in accounting and law firms? Are their income closely related to their performance? Are we comparing like with like? Should we not be looking at the duties and responsibilities of Superscale G and compare them with jobs of similar duties and responsibilities in the private sector? I suggest that we look into the job content of the Superscale G officer's job and do a private sector comparison. This is considerably easier to do for Superscale G rather than for Ministers. This would be more convincing than simply linking it by age alone. I do not know of any private sector job, no matter how stringent the entry requirements are, that will guarantee the job holder to be paid among the top of his age cohort. Let me now turn to the impact on the private sector. Among the CEOs that I have met over the past 10 days or so, their concerns seem to centre more on benchmarking Superscale G, more so than the Ministers. This is due to, firstly, the much larger number of officers in Superscale G and up and, secondly, the subsequent adjustment of the levels below Superscale G.”
“Mr Speaker, Sir, as I listened to the Prime Minister's opening remark yesterday, I find myself in agreement with the principle he pronounced. I agree with the principle that Ministers and senior public officers must be paid comparative wages, vis-a-vis the private sector. It is laudable that our Government has chosen to deal with this thorny issue in this open and transparent manner. I support the linkage of Ministers' and senior civil servants' pay with that of the private sector. This is a realistic approach. Singapore is a small country with high mobility. It is a very real alternative for our high level officials to cross over to the private sector. Therefore, comparison with the private sector is realistic. But to do this, Singaporeans must be convinced that such high level salaries are fully justified. Let me now turn to the benchmark for Staff Grade I. The White Paper suggested benchmarking the Staff Grade I against the average of 24 individuals in six professions. I feel that this benchmark is: (1) a bit on the high side, and (2) that the sample of 24 is too small and, therefore, can be biased by a few individuals. Because the White Paper is benchmarking against the best performing 24 individuals for any one year, large bonuses or significant stock options may skew the group average. Depending on the turnover of the 24 individuals from year to year, the group average can err on the high side. This point has been adequately covered by previous speakers. In setting the Ministers' benchmark, we have the choice of benchmarking against a smaller but more selected sample of 24, and we take a one-third discount. Or we have the choice of taking a larger group, say, eight to 10 from each of the six professions, and have a smaller or no discount.”