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Will govt stand with S'poreans in bad times? By Andrew Loh

Third ministers’ pay hike in two years – Staying together or moving ahead?

Andrew Loh / Deputy Editor

On 9 April 2007, Minister in Charge of the Civil Service, Mr Teo Chee Hean, announced a three-step formula to revise salaries in the public sector to bring them in line with the private sector. (link) Specifically, ministers and senior civil servants’ salaries would be brought to 88 per cent of the benchmark by the end of 2008.

The first two revisions have already taken place – on 1 April 2007 and on Jan 2008. Salaries are now at 77 per cent of the benchmark.

The second revision saw such a huge outcry that PM Lee had to announce he will donate his increases to charity. (link) This was seen as a move to assuage unhappiness on the ground. PM Lee explained that it was to give him “the moral standing to defend this policy with Singaporeans”. (link) But Mr Teo said that “it is wrong to think that a bigger pay would undermine the moral authority of the government.(CNA)

What is more important is what Mr Teo himself said, when he defended the pay hikes in April 2007:

I've been asked whether this is a good time to make such salary adjustments. But, actually the point is that such salary adjustments must be done in good times. Otherwise, we'll end up with problems in the public service. (Emphasis mine) (CNA)

Well, times are not so good now. In fact, it will be rather bad, according to all predictions, forecasts and projections – including the Government’s own.

So, will the Government go ahead with the third hike which, according to Mr Teo, will take place by the end of this year?

One suspects that when the Government first decided that they would have the three-step increase, it probably thought that the economy would be robust in 2007 and 2008 – and beyond. This was on the back of the three years of economic recovery prior to 2007. Indeed, in July 2007, Minister Mentor Lee Kuan Yew himself said Singapore was in a “golden period”. "If there are no wars or oil crises,” he said, “this golden period can stretch out over many years.” (MFA)

Seen in this context, the Government probably thought that they would be able to carry the ground on the salary hike issue. As long as the economy continued to hum along, Singaporeans would not be too bothered about high salaries for our ministers.

But politics is a funny thing – and not all forecasts and predictions, even by wise old men and a “special”, “unique” and “exceptional” government (link), come true accordingly.

2008, especially, turned out to be a roller-coaster ride for the Government, which was caught off-guard by many issues which now threaten to cost it some political capital.

After ministers got their second pay hike in Jan 08, the very next month, in February, Mas Selamat Kastari escaped through a toilet window in a detention centre. It became, quite easily, the biggest news (some would say the biggest joke) of the year.

After 10 months, he is still at large and the Government continues to believe that he is still in Singapore even as they tell the public that they have no proof of it.

In April 2008, inflation in Singapore reached a 26-year high of 7.5 per cent. (link) The Government, clearly, was caught off guard by this. (See here: Inflation projections – a moving target.) Singaporeans experienced a spiralling rising cost of living, especially in areas such as transport, food and healthcare. Retrenchments have started – first with DBS and then with NOL.

The latest revelation that town councils have lost money in investing in structured products have also received angry reaction from residents. All these taken together with other gaffes such as the Lee Bee Wah/STTA saga, contentious issues such as compensating organ donors, and the predicament of Las Vegas Sands’ Integrated Resort.

In a nutshell, the ground is not sweet.

For the Government to push ahead with a third pay hike for its ministers will require the expenditure of more political capital – especially when an early election is on the cards, despite what the Government may say about it.

2009 will mark the PAP’s 50th anniversary. One can be sure that if an election is held then, the PAP would do everything it can to win convincingly – whether it is through pork-barrel methods of giving out cash on the eve of polling day, as they did in the last elections, or through the same tried and tested character assassination of opposition members tactics adopted in past elections. Nothing will be allowed to mar the party’s half century milestone of existence, you can be sure.

And this is where we may speculate about what the Government might do vis a vis ministerial salaries. They will have to take into account any political fall-out from giving themselves an even bigger pay cheque.

Here are the possibilities, with my own rating for the most probable:

  1. Go ahead with it. There is no political opposition strong enough to capitalise on it. Tell the people that in this time of difficulty we need to attract talented people even more. Thus, the need to increase salaries. This is probable especially if the budget in January is a generous one. (Strong probability)
  2. Go ahead with it but with smaller increases than planned. (Probable)
  3. Postpone it and say “we are standing with Singaporeans during this time of recession.” (Unlikely)
  4. Postpone it and ministers take a pay cut at the same time – to show solidarity with Singaporeans. (Unlikely)
  5. Third hike cancelled or abolished. (Definitely unlilkely)

In its 2006 General Elections, the PAP’s manifesto was “Staying Together, Moving Ahead”. Two years after that election, it will be interesting to see how the PAP Government live up to that declaration – especially at a time when it would, in most people’s eyes, be wise to indeed stay together with Singaporeans. Or will ministers be “moving ahead” while Singaporeans lose their jobs by the thousands come the new year? A clue about whether the Government will indeed increase ministers' salaries will be to watch if there are any increase for the President's pay in the coming weeks.

By the way, the PAP came into power in the elections in May, 1959. 50 years on, I am sure it is tempting for them to want to hold the next elections to coincide with that anniversary - especially when Mr Lee Kuan Yew is still around.

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