Ministerial salary review – what’s missing?

Posted by theonlinecitizen on January 4, 2012

~by: Leong Sze Hian~

I refer to the report of the Ministerial pay review committee (Review Committee’s full report HERE).

Whose pay grew more?

Since the new benchmark is the median income of the top 1,000 earners who are Singapore citizens with a 40% discount, why is there no data as to what this figure was, on a yearly basis, over the last 10 years?

Without this data, how do we tell what was the annualised growth rate for the last 10 years?

Who had a higher annualised growth rate? – Ministers or the “top 1,000”?

Given that we took seven months to conduct the review, I am rather surprised that this is missing, as some may say isn’t this rather obvious to enable a thorough review?

Actual versus benchmark data?

Actually, citing the MR4 benchmark data for the last 10 years, may be somewhat meaningless, because I believe it does not include the bonuses paid, and thus not the actual total Ministerial pay received.

What we need to know is the actual average Ministerial pay versus the new “top 1,000” benchmark including the new National Bonus average, to determine another dimension into whose annualised growth rate was higher?

For example, if the “top 1,000”’s annualised growth rate was say higher than Ministerial pay, then the current reduction may be restored in just a few years’ time.

It may even be much higher after that, relative to the current formula.

Perhaps what we also need to know is the actual total pay of each Minister, without disclosing their names.

Even after this extensive review, Singaporeans may still don’t know exactly how much each Minister or band of Ministers were paid.

Easy bonus targets?

With regard to the National Bonus Matrix, achieving a Real Median/Lowest 20th Percentile Income Growth Rate for Singapore Citizens of just 0.5 per cent, will qualify for a 50 per cent Payout level.

This may arguably be one of the lowest targets that I have seen, to get a bonus.

Since the unemployment rate of Singaporeans is now at 3 per cent, by giving the maximum 200 per cent Payout level on just 3.5 per cent or lower, may arguably be the easiest target to get a maximum bonus.

With GDP growth expected to slow to one to three per cent next year, and which may be sluggish for the next two years, will the new formula result in a higher bonus, since no GDP bonus would be paid for GDP growth of 2 per cent or less under the current formula?

Also, since the unemployment rate for Singaporeans was only available recently this year, as in the past it was always lumped together with permanent residents (PRs) under the resident unemployment rate, was the committee privy to the past years’ Singaporean rate which Singaporeans still do not have access to now?

Pension to CPF?

With the change from pension to CPF, has the additional employer’s CPF contribution, tax deduction on the employee’s CPF contribution and accrued interest, been accounted for in the inputed pension pay reduction under the new formula?

Deterring real talents?

What the new formula may fail to address, may be the fundamental issues that we may be attracting some people with the wrong motivation, such as those that may quit if they suffer their first loss in a general election.

Or the high pay may deter talented, successful, wealthy and high income Singaporeans from serving, as long as their relatives, friends and the general public may chide them as being in it more for the money.

The respect for and pride of public service which were arguably universally accepted in the past may have been diminished by the high Ministerial pay.

So, are we paying so much that we may be deterring some real talents from serving our nation?

By the way, how many of those who became Ministers earned more than the “top 1,000” benchmark, before they became Ministers?


About the Author

Leong Sze Hian has served as the 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), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.