Hard truths about ministerial wages

The following is an excerpt from Singapore Democrats

John Tan/

John Tan with Dr Chee Soon Juan and Vincent Wijeysingha at the official annoucement of SDP's Shadow Budget

In my last article (here), I gave readers a sense of our minister wages in actual dollars. I apologize if you suffered the revolting churn in your stomach after reading the obscenity. In this piece, I want to point out the fallacies of pegging minister wages to the GDP.

The GDP is one of the indicators of the size of an economy. It is sensitive to a multitude of factors such as the production of goods and services, the spending of consumers, investments and the government, and the value of export among other things. Some of these factors are not necessarily good for society.

For example, when the government buys more military hardware, GDP goes up. When cost of living skyrockets, GDP goes up. When housing prices hit the roof, GDP goes up.

Even when Sports Minister Dr Vivian Balakrishnan busts the Youth Olympic Games budget, yes, GDP goes up!

It is easy to see how the concept of pegging ministerial bonuses to GDP growth is entirely flawed. Yet our ministers have a specific bonus pegged to GDP growth called the GDP bonus (GB) that accounts for a large portion of their annual remuneration.

The GB pays 3 months of a minister’s monthly salary if the GDP grows by 5%. The maximum is an enormous 8 months if the GDP grows by 10% or more, such as last year. The GB does not pay if GDP growth is below 2%.

In a good year, even if every minister does nothing, the GDP would go up. In a bad economy, a government would typically pump money to stimulate it. That act in itself would contribute to the increase in GDP.

In Singapore when GDP does go down during a recession, our ministers still get their 16 months fixed pay. All they would miss are their bonuses for the year. When the economy recovers, they would recoup everything and then some.

Compare this to their commercial counterparts who, in a recession, may lose more than just their bonuses. Their entire investments and livelihoods could be wiped out. Our ministers share only the benefits that businesspeople in the private sector reap, not the risks and consequences that they face.

Is this why the Government wanted to build the casinos so badly? Is this why they are so motivated to keep foreign workers coming in?

To read on, click here.


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