Ministers’ bonus: Too easy?

singapore-unemployment-rate-foreign-workers-increase

Are the Minister’s bonuses too easy to achieve?

I refer to the articles “Singapore’s million-dollar ministers are not getting a pay rise” (South China Morning Post, Mar 2) and “Committee suggests adjusting ministers’ targets” (Straits Times, Mar 1).

The latter states that “But the Government did not adopt these recommendations, along with the committee’s suggestion to raise ministerial pay.

A change in the unemployment rate indicator would make the target harder to hit.

The committee proposed tightening the target range from the current range of 4 per cent to below 4.5 per cent, to 3.25 per cent to below 3.75 per cent.

Mr Ee said it would make it “tougher” for the ministers to meet the target, but added: “We wanted to set a target so that the focus will continue to be on employment.”

Three of the four factors may be controversial for the following reasons:-

… Unemployment rate – when was the last time that the unemployment rate was four per cent or higher? Well, it was in 2009 (4.5 per cent – 50% bonus). It has been below 3.5 per cent in 10 out of the past 11 years – resulting in a 200% bonus.
With the granting of about 20,000 new citizens every year (about 21,000 in the last two years) – the unemployment rate of citizens may be higher than it actually is being reported

… Gross income of the 20th percentile – some of the increase was due to the increase in the employer CPF contribution which is not disposable income. Thus the adjusted estimated real increase in income for the 20th percentile was only about $4 per annum for the last 15 years or so from around 2000 to 2016. Why should even a 50 per cent bonus be given for a mere 0.5 per cent growth ($10.53 a year (2016 $2,106 x 0.5%)?

… GDP growth – it was announced last year that infrastructure spending would be increased by about $22 billion. So, the Government may simply increase infrastructure spending or other GDP boosting measures, which arguably may be at the expense of more spending to help lower-income Singaporeans. The comparison of just $130 million spending for ComCare against infrastructure spending is a case in point.

Leong Sze Hian

About the Author

Leong
Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.