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GDP Bonus: Lots of dollar$ but no sense

by Andrew Loh

Pay us or your women will become maids!

Andrew Loh

After dishing out the goodies to Singaporeans, ministers are rewarding themselves with the biggest goody of all.

“Mr Teo yesterday revealed that because of the ‘exceptionally high’ growth in gross domestic product (GDP) last year, senior officials, including ministers, will receive the maximum GDP-linked bonus, which ‘accounts for a maximum of about ¼ of the annual salary of senior officers, or eight months’.”

– Straits Times, 3 March 2011, reporting the announcement by Minister in charge of the Civil Service and Deputy Prime Minister, Mr Teo Chee Hean, of a bigger pay packet for “top public servants” this year.

Whenever salaries of ministers are “revised” upwards, criticisms of this flow thick and fast. This happened in 2007 as well, when salaries for ministers were raised by some 60 per cent. Minister Mentor Lee Kuan Yew lambasted Singaporeans for criticizing the increase then:

"I say you have no sense of proportion; you don't know what life is about. The cure to all this talk is really a good dose of incompetent government. You get that alternative, and you'll never put Singapore together again." (New York Times)

“Lee senior told the Straits Times on Thursday…  that it is "absurd" for Singaporeans to quarrel about ministerial pay and warned that Singapore would suffer if the government could not pay competitive salaries.

"Your security will be at risk and our women will become maids in other people's countries," he said. (CNN)

Well, that’s MM Lee – who lives in the “real world”. Or so he claims. (Reuters)

Whatever the PAP Government’s reasons for rewarding itself a eight-month bonus this time, it is an excessive amount, by any measure. How the Government arrived at this figure of eight months has never been explained. It seems almost an arbitrary number plucked out of thin air.

The justification Mr Teo gives for this latest revision is simply because the GDP is expected to grow 14.5 per cent this year – which, according to the formula for salaries, merits a bonus of eight months since GDP growth exceeds the threshold 10 per cent.

How much have salaries for ministers increased since 1994, when the formula for pegging ministers’ pay to the private sector was first mooted? In 1994, the Prime Minister’s salary was S$1.15 million. Currently, his salary is S$3.76 million – an increase of about S$2.6 million in 16 years.

It is unclear if the PM gets rewarded with a GDP Bonus but his ministers do.

8 months bonuses – justified?

I think Singaporeans will recall the many failings of some ministers these past few years – including the Prime Minister himself.

Lets look at some of these individual ministers and their failings and consider if these ministers deserve an eight-month bonus.

DPM Wong Kan Seng

His failures are epic. The almost comical simplicity of Mas Selamat’s escape from Singapore’s Internal Security Department’s grasp is well remembered by one and all. Yet, instead of taking full responsibility and resign, DPM Wong instead pointed the finger – audaciously, I might add – at the lower rungs in his ministry. Yet, this is not his only failure with regards to Mas Selamat. His ministry failed to arrest Mas Selamat not once but twice. And both times after the man has escaped, it was our neighbouring countries which re-captured the suspect and handed him over to Singapore.

Another failure of DPM Wong is in raising Singapore’s birth rate. DPM Wong oversees the National Population and Talent Division, charged with arresting the declining procreation rate. It was reported recently that our Total Fertility Rate has dropped to a record low of 1.16, one of the lowest in the world.

Vivian Balakrishnan, Minister MCYS

Another minister with epic failures to his name. From the quadrupling of the budget for the Youth Olympic Games, which went from its original S$104 million to S$387 million, to the number of homeless people camped out in parks all over Singapore, Dr Balakrishnan seemed oblivious to these. Here is a minister who would argue – quite ridiculously – with his fellow PAP MP in Parliament over an extra S$1 a day for those on Public Assistance – the old, poor, sick - but who thinks nothing of splashing almost S$400 million on a sports event. Indeed, he “admitted three times” that he got the YOG budget wrong.

As for the homeless, instead of similarly admitting that he “got it wrong” and that his finger wasn’t on the pulse, he went to Parliament and ridiculed a homeless couple and “irresponsible websites” which brought the matter to his attention!

Raymond Lim, Minister of Transport

If any minister was sleeping on his job, Raymond Lim is he. The crowded MRT trains seem to have caught the minister by surprise. Apparently, he woke up to the problem late, at which time commuters were already suffering the results of his slumber. Even today, the trains are packed, and nothing effective seems to have been done to improve the situation. Audaciously, SMRT’s Chief Executive Saw Phaik Hwa laid the blame squarely on commuters – “People can board the trains. It is whether they want to,” she said last year. Mr Lim kept his silence instead of admonishing the good CEO.

What about Mr Lim’s solution to traffic jams on the roads? Install more Electronic Road Pricing gantries, and increase the fees. That seems to be his only solution – which in any case, does not seem to alleviate the problem, especially during peak hours.

Yaacob Ibrahim, Environment and Water Works Minister

When many areas in Singapore were flooded in November 2009, Mr Yaacob famously said this “occurs once every 50 years”. As it turned out, that wasn’t true. The following months in 2010 saw massive floodings all over Singapore, the most noteworthy was the one at Orchard Road. Mr Yaacob and his lieutenants then blamed it on “choked drains”, and of course, ultimately laid the responsibility on Singaporeans.

Mah Bow Tan, National Development Minister

There is no need to elaborate too much on Mr Mah’s “accomplishments” these last few years. I think the results speak for themselves. He allowed housing prices to escalate before making a show of introducing “cooling measures” to try and rein in prices – all of which have failed, even until today.

Certainly, this is one minister who does not, by any stretch of the imagination, deserve an eight-month bonus.

Khaw Boon Wan, Health Minister

Mr Khaw proved to everyone that he truly lived in the Ivory Tower when he declared, rather gleefully, how he had to pay only S$8 out of his pocket for his bypass surgery in 2010. He was trying to show that healthcare in Singapore is cheap and affordable. The truth is that more and more Singaporeans, especially the elderly ones, are going overseas for treatment and to fill prescriptions because they can’t afford to do so in Singapore.

And I dare say that, contrary to what the minister tried to portray, no one in Singapore pays S$8 for a major surgery. Not any average Singaporean anyway.

Lee Kuan Yew

What can one say about this Old Mascot? From dissing leaders of our neighbouring countries, to casting doubts on Singaporean Muslims’ religious practice, the man is, surely, past his prime. His Government Investment Corporation of Singapore (GIC) lost more than S$50 billion in investments.  No one knows what goes on in that secret agency. As someone who claims to have handed the reins of power over to the younger leaders, MM Lee seem to love hogging the limelight and is in the news more than any other minister, releasing so many books which claim to tell the “Singapore story”, and provide “hard truths to keep Singapore going”. Seems his preoccupation is to write books and preach from his bully pulpit. As he himself has said several times, he is no longer in charge, he is “not so quick on the uptake”, and he doesn’t even spend as much time in the office as he did previously.

These are some examples of ministers who, in spite of major failings, are going to receive eight months worth of GDP bonuses running into the millions of dollars of taxpayers’ money.

There is a moral issue in this obscene – lets call a spade a spade – eight-months bonus for ministers. Can you or should you enrich yourself in such a blatantly despicable manner when so many Singaporeans are still struggling to cope, when job security is no longer assured, when Singaporeans are told to brace themselves for record inflation this year, and when retirement is no longer something Singaporeans can look forward to with gladness? And when Singapore has the second highest income-inequality gap in the world?

Also, when the performance of the current government leaves much to be desired, as can be seen in its many failures of the last few years, is GDP growth the only yardstick which matters? After the elections, the government could very well import another million foreign workers. GDP growth would double to 30 per cent. And ministers could reward themselves with another eight months worth of bonuses.

Simply using GDP growth as a yardstick is quite stupid, really. It makes no sense whatsoever.

In the 2004 Parliamentary exchange with NCMP Steve Chia, PM Lee Hsien Loong said:

“The Member’s implicit question is: are the Ministers enriching themselves again? And the answer is, we are going on market terms and, if anything, we are paying below what the market is.”

Well, if ministers were assessed on their performance in “the market” (ie, the private sector), it is not improbable that at least some of them would have been fired long ago, let alone be given such obscenegenerous bonuses.

One can only hope that the Prime Minister remembers and heeds his own words in 2006:

"We must not allow ourselves to be divided between haves and have-nots, or winners and loser. If we let a politics of envy drive a wedge between us, our society will be destroyed, and all will suffer. That must never happen.”

Finance Minister Tharman Shanmugaratnam in his Budget 2011 speech declared that the government will raise workers’ salaries by 30 per cent in the next 10 years.

Ministers, on the other hand, will now receive a 30 per cent increase in total remuneration with just a stroke of the pen. In fact, with just a few words in Parliament and the dirty deed is done.

Does it make sense?