Cabinet pay
May soon rise
During May election, hikes in 5-7% GST and cabinet ministers’ pay were widely speculated. Now the 2nd part may also come true. By Seah Chiang Nee.
Nov 26, 2006

By far the highest in the world, Singapore cabinet ministers’ salaries are likely to head for another increase soon.

It follows the recent announcement that civil service salaries would be kept competitive to retain talent, although it did not cover political leaders.

However, Prime Minister Lee Hsien Loong had given a strong hint of it when he said in March that ministers’ pay was lagging behind salary benchmarks.

This was widely anticipated during the May general election when speculation was rife that two unpopular hikes would come as soon as polling ended: A GST (Goods and Services Tax) increase from 5-7% and a rise in cabinet salaries.

The GST hike from 5-7 per cent was recently announced. And observers say the cabinet pay now looks almost certain to materialise.

With the next election five years away, the news is unlikely to cause immediate damage to the ruling People’s Action Party (PAP).

However, public resentment remains high against the huge salaries paid to the Prime Minister, Minister Mentor and Senior Minister as well as other ministers, although it wasn’t enough to bring down the government.

Currently, ministers are paid basic annual salaries (plus performance bonuses) and, at age 55, they are entitled to collect both a salary and full pension.

The President's basic salary US$1,500,000 (S$2,507,200) while the Prime Minister gets US$1,100,000 (S$1,958,000).

Minister's Basic salary ranged from US$655,530 to US$819,124 (S$1,166,844 to S$1,458,040) a year.

In comparison, the president of the United States, the most powerful nation in the world, earns US$400,000 and US$50,000 expenses, less than what a junior minister earns in Singapore. In UK, Prime Minister Tony Blair earns US$170,556 annually.

When Mr. Lee Kuan Yew devised the high salary scheme in 1994 – allegedly as a means to combat government corruption - many Singaporeans opposed it including some of Lee’s own colleagues.

Mr. Lim Kim San had "his reservations against throwing money at politicians. His personal preference was to give them challenges and dare them to overcome them.”

Not convinced that high pay packets were necessary to beget good politicians, he said in an interview in 2000: "You don't throw money at yourself. We have a lot of people, like entrepreneurs, who will accept challenges. What is worrying me is that we are having less people who will take up a challenge'." (S.T. July 21, 2006)

Lee has defended the high salary as necessary to give Singapore its good governance and keep it Asia’s least corrupt country.
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