Ministers’ Salaries – is the government losing touch?

By Leong Sze Hian

I refer to the increase in ministerial pay.

Before the increase, political appointment holders take home $ 46 million in total a year, which is only 0.13 per cent of total Government expenditure, or 0.022 per cent of Singapore’s Gross Domestic Product.

As to not having a sense of proportion in quarreling about $74 million, after the 60 per cent increase by the end of next year after the 3-step salary revision announced in Parliament on April 9, from a proportional perspective, it is 151 per cent of the total amount of donations received by the Community Chest in 2006.

For the 1st to 10th decile of non-retiree households surviving on only $160 average monthly income from work per household member (Department of Statistics’ “Key Household Income Trends 2006), which I estimate to be about 324,000 Singaporeans living in about 90,000 households, this sum can increase their income of $ 160 by 143 per cent to $ 388.

If we take 0.13 per cent of total Government expenditure as a benchmark, the United States and Malaysia would be paying political appointment holders about US $ 3.5 billion (S$ 5.3 billion) and RM 160 million (S$ 70 million) respectively.

As to private sector achievers sacrificing their lucratic salaries to join politics, with no guarantee of success and took a chance, I would like to ask in the history of Singapore, how many political appointees have ever failed so that we may get a sense of the proportion of the guarantee of success and the chances they are taking ?

What is the proportion of political appointees who sacrificed higher paying jobs in the private sector, versus the proportion who may end up with perpetually risk-free higher salaries and pensions in public service ?

“It’s a competitive world in which we live, and if we can’t compete we are not going to live well” – If political appointees live well earning about $ 5,300 a day, I think the 324,000 Singaporeans living on $ 160 a month may need a lift in their living too.

Describing political leaders who should be ready to sacrifice for the good of the people as an admirable sentiment, – may I suggest that a poll be conducted among all political appointees to gauge the proportion that needs more pay in order to sacrifice for the good of the people ?

The eyes of the world may be on Singapore, as we debate whether a person who earns $ 5,300 a day, may in a sense, be losing touch with those who may be at the other end of the spectrum of Singapore’s 105th ranking in the world for income equality, and 130th out of 178 countries for Happiness.

Our daughters and mothers may not be maids in other countries, but some of our elderly fathers and mothers are working as cleaners in food courts or collecting empty drink cans, earning about $ 600 a month.

I know of some Singaporeans who have worked as maids, By the way, what’s wrong with being a maid as they provide a valuable service, doing an honest job for a decent living?

A maid in Canada is paid about C$ 2,000 (S$ 2,600) and Hong Kong’s minimum wage for maids is HK $ 3,400 (S$ 660), which may be more than what some Singaporeans earn.

Pegging pay to two-thirds of the median income of the top 48 earners in the professions may in a way, be an inherent bias, which may tend to contribute to policies in the future that may continue to widen the income gap. The underlying principle that people need to be paid more to be motivated to perform is not flawed. However, some element of pay should also be pegged to the ability to raise the income of lower-income Singaporeans.

For example, the pay after the increases is about 135 times the $ 1,180 average monthly income of the 11th to 20th decile of households in Singapore, or 78 times the $2,040 median monthly income of Singaporeans. Perhaps this could also be considered as part of the benchmark for pay increases in the future.

The above calculations already reflect that by the end of 2008, the salary will increase further to 88 per cent of the benchmark.

For other ranks of the civil service, the highest increase this year is 16 per cent.

About the author:

Sze Hian has 5 degrees and 13 professional qualifications. A Wharton Fellow, alumnus of Harvard University and the United Nations University International Leadership Academy, he has served as Honorary Consul of Jamaica, President of the Society of Financial Service Professionals, Representative of the Inter-American Economic Council, Chairman of the Institute of Administrative Management, and founding Advisor to the Financial Planning Association of Indonesia. He has been invited to speak more than 100 times in over 15 countries on 5 continents, authored 3 books and quoted over 700 times in the media.