RP’s Response to Setting Up of Committee to Review Ministerial Pay

PRESS RELEASE 22/05/2011

The Reform Party’s Response to Setting Up of Committee to Review Ministerial Pay

The Reform Party notes the news that the PM has set up a committee to review Ministerial salaries, to be headed by the chairman of the National Kidney Foundation, Mr. Gerard Ee.

We would like to point out that reducing ministerial salaries and replacing the current Key Performance Indicators such as GDP growth by a set of KPI directly linked to our citizens’ welfare was the nineteenth pledge in our election manifesto. To quote directly:

“19. Reduce waste and inefficiency in government starting with slashing ministerial salaries and replacing it with performance-linked earnings tied to indicators directly related to your welfare.”

And it was also stated in our election flyer:

The Reform Party will work to ensure that policies introduced will focus on increasing the real median income through raising productivity. We shall be held responsible because a key determinant of ministerial salary will be pegged to the increase in real median income.

Unfortunately few voters may have been aware of our proposals due to the almost total black-out on the Reform Party in the state-controlled media. It is ironic therefore to see how often the state-controlled media are using the term “reform” in relation to the transformation that the PAP is supposedly undergoing and how much the government is adopting the language and policies of the Reform Party.

The Reform Party stressed continually at our election rallies that competition in politics was just as necessary as in business, if we are to get better, more intelligent policies and a more responsive government. Nothing could more clearly illustrate the effects of competition than what is happening now. Suddenly we have a government that appears more afraid of the people than the people are of it, a stunning reversal of fortune after fifty years of the latter. Following on the heels of the PM’s apology, we now have the government announcing a review of ministerial salaries.

Of course there is probably no other issue that so unites the Opposition and the voters of Singapore than the agreement that our ministers are grossly overpaid when compared with those in other advanced countries such as the United States, Britain, Germany, Japan and Hong Kong.

But what makes it hard for the Singapore people to swallow is the impression that these highly-paid ministers are able to get away with national blunders and poorly conceived government policies. Worse still is their appearance of being indifferent to the daily struggles of the common Singaporean.

Certainly the predictable background and unimpressive track record of the new PAP candidates could not be a better illustration of the lack of correlation between high ministerial pay and performance. Indeed our last press release listed this as another of this government’s failed policies and that there seemed instead to be a negative correlation. Furthermore the targets this government set itself to justify their high salaries were both undemanding and divorced from any connection with raising the living standards of ordinary Singaporeans. Judging by the increase in the President’s salary, it would appear that our ministers and civil servants awarded themselves large bonuses last year on the back of record GDP growth. However 14.7% GDP growth is meaningless if it is driven by tax subsidies (like Ireland’s used to be) and goes largely to foreign workers and companies. At the same time our own workers’ wages fail to keep up with inflation and they face replacement by cheaper foreign labour.

Therefore, if this is really a genuine attempt to tie Ministerial pay directly to a more demanding set of performance indicators centred on Singaporeans’ welfare, then the Reform Party welcomes the PM’s initiative. However we are concerned that the person, Mr. Gerard Ee, chosen to head the committee, though undoubtedly a good person, is too much “one of us” and has a background in public service that may make him reluctant to take the bold steps necessary for genuine and effective reform.

The Reform Party would like to see a greater attempt to measure quantitatively the value added by our ministers in raising the living standards of our citizens. They could start by measuring our ministers’ salaries against those of countries which have done much better in boosting productivity and living standards. For instance in the US, where GDP per hour worked grew twice as fast as Singapore’s over the last ten years, the President only earns US$400,000, or less than 20% of our PM’s salary, for a job that is arguably much more demanding and stressful. We are confident that such a study will reveal little or no correlation between ministerial pay and economic success.

We repeat the call in our election manifesto for a small fixed component and a greater variable component linked to a broader set of KPI, including real median incomes normalized by hours worked. The Reform Party would go further and say that success in achieving these targets should be judged by an independent committee over an entire Parliamentary term to prevent manipulation. It would be better if pay outs were held over and made on a long-term basis. A model could be current regulatory guidelines for the financial sector in the US and Europe after the 2008 financial crisis.