Answering the wrong question on ministerial salaries
~by: Siew Kum Hong~
By now, the highlights of the report by the Committee to Review Ministerial Salaries should be well-known, so I won’t rehash them. A search on “singapore ministerial salaries” will quickly bring you up to speed.
There have always been two types of criticisms leveled at ministerial salaries. The first category comprised criticisms of the formula itself, that it led to distortions and did not achieve the outcomes we wanted. These are technical criticisms that implicitly endorsed the principle of pegging ministerial salaries at a discount to supposedly equivalent private-sector salaries.
The second category comprised criticisms of the absolute amount of ministerial salaries, which are seen as being excessive in their absolute amounts and completely out of touch with normal Singaporeans. These are political criticisms that will persist regardless of the formula used, because they stem from a fundamental perception that the absolute salaries are simply unjustifiably high, regardless of the formula used.
Well, here’s what I think: the Committee gave a good answer, but to the wrong question. The Committee’s recommendations will address the first type of criticisms, but will do nothing to stem the second.
I actually happen to think that within the limitations of its terms of reference, the Committee did a pretty good job. That’s because its terms of reference required (and perhaps limited) the Committee to “take into account salaries of comparable jobs in the private sector and also other reference points such as the general wage levels in Singapore”, and to implement “a significant discount to comparable private sector salaries to signify the value and ethos of political service.”
The Committee fixed a lot of the major flaws in the previous formula. For instance, by expanding the sample size of income earners from the top eight earners in six professions to simply the 1000 highest-income Singaporeans, the Committee effectively rendered irrelevant the problem of the 48 top earners being a changing cast while the ministers themselves did not change. Similarly, the new bonus structure is much improved on the previous simplistic reliance on GDP growth as a proxy for the good performance of the Government (and on that, I was reminded of this defence of the previous bonus structure by now-DPM Teo Chee Hean).
But I do think that the Committee was asked to answer the wrong question. The Committee’s terms of reference had already pre-supposed that fundamentally, the proper way to determine ministerial salaries was to compare with private-sector salaries (“how do we calculate ministerial salaries taking account private sector salaries and other guidelines”). In other words, the Committee was only being asked to answer the technical question of precisely how to calculate ministerial salaries based on private-sector salaries.
But to my mind, the question of ministerial salaries is actually a political one (“how do we determine ministerial salaries in a way that Singaporeans can and will support”). And so, we ended up with a technocrat’s answer to a technical question, when what we really needed was a political answer to a political question. Since we didn’t get that, the political criticisms I had referred to will almost certainly continue.
It is clear from the report, and subsequent public comments, that the Government, and the Committee, continue to think about ministerial salaries in terms of private-sector salaries and sacrifice by office-holders, especially financial sacrifice.
I think that is a completely incorrect approach to the question, which as I have said is a political one. This approach will never get true buy-in from the majority of Singaporeans, because they see the Government and ministers in completely different terms.
The Government and the Committee see public service as a sacrifice, as if it is some sort of burden or imposition. But I, and I suspect most Singaporeans, see public service as a calling, as an honour and a privilege. It is something to be proud of, and not something to bemoan and begrudge. That is what the spirit of public service is about.
The Government and the Committee also see private-sector jobs as being closely equivalent to ministerial posts, as if running a company is very similar to running a country. I think most Singaporeans disagree, because they instinctively understand that running a country is a political undertaking that is fundamentally different from running a company, requiring as it does political sensitivities and skills that are not always or usually needed for corporate success (and here, I am talking about popular politics, not office politics).
I do want to be clear: I don’t necessarily think that S$1m a year is excessive. I don’t know for sure what number would or should work, but it probably won’t be a small number. I do think that Singaporeans should be more mindful of wanting ministerial salaries that are so low, that only rich people will run for office. I also think Singaporeans should be careful about cutting salaries so much, that our office-holders become distracted from the all-consuming job of running the country by personal financial needs.
So that begs the question of how ministerial salaries should be set. Well, I think the starting point should be that we do not want money to drive ministerial aspirations, but at the same time we do not want ministers to have to worry about their personal finances.
One way to do this is to figure out what a reasonable salary for a minister would be, such that he/she can maintain a reasonable lifestyle. And by reasonable lifestyle, I would think that the salary should be enough to comfortably cover mortgage payments for a reasonably-priced landed property in a reasonable location; payments for 2 cars for the family; education for a minister’s children (including overseas education); some retirement savings; and so on.
This may or may not be a big number, but then at least it becomes more politically defensible in terms of this being what is necessary to allow the minister to do his/her job without undue distractions and while allowing the minister to maintain a reasonable standard of living. It also completely strips away the effects of the widening income gap, although it does become subject to changes in the cost of living. It represents an approach that can be explained to people and which people can instinctively understand (viz. the need to take care of one’s family).
Sadly, this is not the approach that has been adopted for Singapore. Which is why I think Singaporeans will continue to be dissatisfied with the level of ministerial salaries in Singapore.
The question of ministerial salaries is a critical one for Singapore. Not just for the obvious reason that it affects who enters into government (and who is attracted to join politics in the first place), but also for how it has severely poisoned political discourse in Singapore. Every time something bad happens, there will be people who will complain about how our highly-paid ministers had once against failed – whether or not this is justified. This cannot be a healthy state of affairs for Singapore.
The Government recognized this, hence the Committee. Unfortunately, I firmly believe that these latest changes will not suck all of the poison out of local politics. What a wasted opportunity.
This article first appeared on Siew Kum Hong’s blog. We thank him for allowing us to reproduce it here.