Bonus for ministers, peanuts for most?

by Leong Sze Hian

I refer to the report “Budget 2011: Higher pay for civil servants this year” (Channel News Asia, Mar 2).It states that:

“Senior officers will also get the maximum GDP Bonus this year, with some getting as much as eight months’ pay”.

Does this mean that some ministers, senior ministers-of-state, ministers of state, parliamentary secretaries, etc, may get as much as eight months pay?

Growth regardless of the outcome to ordinary Singaporeans?

One of the primary reasons that caused the last global financial crisis in 2008/2009, was that decision makers in financial services were given incentives and huge bonuses to chase after profits, regardless of the risks.

By aligning senior civil servants’ pay to GDP growth, are we not in a way, going down the same path?

After two years of negative wage growth in 2008 and 2009, last year’s real median wage growth was only 0.5 per cent.

Last year’s real median household income growth was also only 0.3 per cent.

So, whilst half of Singaporean workers had a real pay increase of less than 0.5 per cent last year, senior officers who already earn millions, may get up to eight months’ bonus?

What about junior officers?

As to “GDP Bonus is zero if GDP growth is two per cent or below, but accounts for a maximum of one-quarter of the annual salary of senior officers, or eight months, when the GDP growth exceeds 10 per cent”, does it mean that only senior officers can get a maximum of one quarter of the annual salary, or eight months?

What is the maximum or number of months that junior officers and officers can get?

Is there something wrong with the statement “After two years of not getting the GDP Bonus, which had amounted to a 18 to 22.5 per cent reduction in their annual salaries, senior officers will get the maximum rate this year”?

If you did not get a bonus for the last two years, is it a reduction in your annual salary? If so, why call it a bonus then? Isn’t a bonus for good performance, rather than be viewed as an annual salary entitlement?

Align bonus to wage growth

I would like to suggest that the bonus of civil servants, particularly senior officers, be aligned in some way to real median wage growth. Otherwise, we may see more of the usual policies of importing more foreigners, as every foreigner contributes to GDP growth – he needs to eat, live somewhere, receives wages, spends money, etc.

Other policies that may fuel GDP growth are allowing foreigners to buy and rent property. Thus pushing up property prices and rentals, etc, and contribute to GDP growth, increasing all kinds of fees like medical, transport, foreign worker levies, etc, which will also contribute to GDP growth..

With regard to:

“On Monday, opposition MP Low Thia Khiang had noted in Parliament that estimated salaries for political appointments had gone up about 30 per cent, from $58.3 million in 2010 to $75.7 million in 2011.

Mr Teo said this reflected the design of their pay structure.

He added that no changes had been made since salaries were revised in 2007.”

Is there something wrong with the design of the pay structure of political appointees, when salaries can go up by about 30 per cent in one year?

If you belong to one of the half of households which had real income growth of only 0.3 per cent last year, how would you feel?

If we divide the $75.7 million by the number of political appointees, will Singapore still maintain its leading position as having the highest paid politicians in the world?

To put this increase of $17.4 million in perspective, we are paying just scores of people an amount that is equal to about 29 per cent of the $60 million that we spend in a year under Comcare to help the 39,500 families whose applications for financial assistance were approved last year.

Reasons for resignations?

The article also reported that:

“The civil service was also affected, with resignation rates rising from 3.5 per cent in 2009 to 4.7 per cent in 2010. Among officers in the Management Executive Service, the attrition rate went up as high as 17 per cent among younger graduate officers.”

What was the attrition rate for officers in the Management Executive Service amongst all officers, and among younger graduate officers, in the previous years?

Salary may not be the main reason for people to leave – it could be due to a myriad of reasons, such as the dilemma of implementing policies that continue to cause hardship to Singaporeans, or the futility of not being able to change policies that one may not agree or be able to live with.

Perhaps the caption of two members of parliament’s (MPs) remarks in parliament on 2 March, “Work hard and be rewarded, not ask the heavens” (ST Breaking News, Mar 2) may apply more so to those getting as much as eight months worth of bonuses, rather than ordinary Singaporeans.

On the same day the GDP-linked bonuses were announced, the Minister-in-charge of ageing issues dismissed calls by MPs for the Government to intervene directly on the issue of parental leave and give more financial support for those who care for their elderly parents. (“No govt intervention on parental care”, ST Breaking News, Mar 2)

Will giving parental leave or financial support to those who care for their elderly parents contribute to increasing GDP growth?

I think the answer is no.

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