Singapore
It pays to be in government
Hefty pay rise stirs rare outcry, and PM’s solitary $3m, 5-year donation to 'worthwhile causes'. Comment. By Seah Chiang Nee.
Apr 14, 2007

FACED with a politically damaging outcry over huge pay rises for political leaders, Prime Minister Lee Hsien Loong has pledged to donate his own increase to charity for the next five years.

By his gesture, he has put pressure on his Cabinet colleagues to follow suit, although he says it is a personal decision and he does not expect them to do the same.

In doing so, Lee has stamped his personal leadership on the country since becoming Prime Minister two and a half years ago.

He also announced that he would, by 2011, name a successor to take over in 10 years’ time. It is the first time he talks of a departure timetable.

His surprising announcement comes at a time when many Singaporeans are increasingly bitter over the 55% leap in ministers’ remuneration over their objections.

Lee’s own salary would have jumped from S$2.46m a year to S$3.1m, five times more than that of President George Bush, leader of the world’s most powerful economy.
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The annual salary structure
With immediate effect, (in Singapore dollars):
President – $3,187,100 (up 24.9%),
Prime Minister – $3,091,200 (up 25.5%),
Senior Minister – $3,043,300 (up 13.5%),
Minister Mentor – $3,043,300 (up 13.5%),
Deputy Prime Minister – $2,452,500 (up 18.8%),
Minister and Senior Perm Sec – $1,593,500 (up 32.5% increase) (MR4 Grade),
Entry Superscale Grade – $384,000 (up 3.3%) [SR9 Grade],
Member of Parliament – $216,300 (up 23.2%).
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The government, led by Minister Mentor Lee Kuan Yew, had launched a major campaign in the media and Parliament, where he controls 82 out of 84 seats, to convince the nation – but failed.

The outcry was widespread among middle-class Singaporeans who earn an average of S$1,500 a month.

“They have crossed the line,” is a common view. The poorest 10%, struggling with S$300 (RM680.70) a month, was livid.

They see the idea of a government paying itself millions of dollars more in salaries, while raising welfare payment to the needy by a piffling S$30 to S$290 (excluding some cash perks and discounts) a month, as extremely poor taste.

Lee’s surprising offer has raised his personal esteem in the eyes of some heartlanders and defused some of the anger.

Hard-core critics, however, dismiss it as “damage control”, with one saying: “Too little, too late. Too bad.”

“I want to make it clear to Singaporeans that my primary considerations are for the future of this nation, and not for my own salary,” said the 55-year-old Prime Minister.

Although not fully placated, since the pay rise remains in place, Singaporeans are, however, hoping that his action is the start of a change of policy.

With their PM setting the example to turn down the unpopular pay rise, it will be difficult for ministers and MPs to do nothing.

Already backbencher Lily Neo has become the first to follow, saying she will turn over her increase in MP's allowance to the needy in her constituency.

Singaporeans are generally angry at this government lavishness on itself.

(The bottom 10% earns only S$300 a month, their income declining in the last five years.)

Until his pay freeze, the Prime Minister had been a major target of the people’s irk.

In Washington, a senior White House official told a correspondent that he “was floored” when told that Singapore’s PM takes home a salary five times that of Bush.

“I’m going to emigrate and run for office in Singapore,” quipped the senior administration official, who sat in disbelief after reading that story.

By and large, Singaporeans do not quarrel that their leaders are largely corrupt-free and efficient and should be paid well to reflect the city’s progress.

Kuan Yew had initiated the mega-wage policy in 1994 for two reasons.

First, it would prevent the sort of corruption that exists in many countries, and second, it would allow the government to recruit the most capable leaders and retain them from being poached by the global private sector.

But Singaporeans are not ready to see them being paid so many times more than leaders in the richest countries and, in particular, benchmark their earnings to some of the top earners in the private sector.

Public office is about service, not profits. One Singaporean remarked: “Now, when I look at a minister or an MP, I see a $-sign.”

For a long time, people had already been demanding that their payments be reduced to be more compatible with world standards. “Instead they are raising it by another 60%,” exclaimed a Singaporean studying abroad.

In a survey on the media website AsiaOne, only 11.4% of the people surveyed supported the pay increase, while 83.7% said no and 4.9% had no opinion.

Some analysts sense a less than full agreement within the government and party leadership and ranks over the issue.

Some people are asking whether the PM’s decision is a response to the public outcry or reflects a difference of views with Kuan Yew.

(PM Lee said his stand had the encouragement of his father as well as Senior Minister Goh Chok Tong.)

The PAP is a closely-knit party, which has always kept its own affairs within its four walls.

(This was written and published in The Star on Apr 14, 2006)

Comment:

I read this when I was in Penang and fully agree with the sentiments expressed.
However, altho I am just as outraged, I think the outrage should be tempered by the following facts, which are surprisingly not highlighted even by the PM et al.

This is the fact that for the misters, unlike in other countries, perks such as housing and cars are not provided except for the PM who is given a car all for himself.

Let's take the PM and compare it on a durian to durian basis with that of other countries. In every other country, the PM is provided with an official residence which is normally very opulent.
Let's disregard the White House which, of course, can't be used as a comparison. Let us just compare the official residences of the PM of say Malaysia and Thailand. Mahathir spent a few hundred million ringgit on the PM's office in Putra jaya.

Other PM's have huge bungalows with free electricity [10 Downing Street, the Chief Executive of HK etc], maids etc.

In the light of all these, an appropriate official residence for a PM would be a bungalow with a land area of say one acre with a swimming pool and 10,000 feet, built in aree, fully airconditioned etc.

Since the PM has to pay for his own residence [assuming he doesn't have one which he has, of course] the cost or renting such a bungalow in Singapore with the current spike in rent would be at least $50,000 a month in a good area.

The cost of providing maids, PUB bills and other incidentals as provided in other countries would be in the region of say $10,000. This brings the housing allowance to $60,000 a month.

This hypothetical allowance would be taxed to the tune of another $12,000 a month as other PM's are not taxed on their official residence.

Thus on a durian to durian basis, the total housing and tax compensation for housing would be aprroximately $72,000 a month. The PM's current salary is around 200,000 a month. Thus his real effective salary is $200,000 - $72,000 which is approximately $130,000.

Thus we should compare his net salary of $130,000 with that of probably the next highest paid official in the world, i.e that of Hong kong who was paid around $40,000 to 50,000 a month 10 years ago. I don't know what his current salary is but it probably is around $70-80K a month.

As for the cabinet ministers, their counterparts elsewhere also get housing and a car allocated to them. In Singapore the ministers can only use the official cars during office hours and are of course not provided with housing either.

Thus for a durian to durian comparison, a house in a good area with say 30,000 sq ft of land with a swimming pool etc would cost around $35K a month to rent. Provision of maids PUB bills etc would add another 5000 a month.

The rental of a Mercedes S class with a chaffeur would add another 12000 a month. Tax compensation another $10,000. Thus the imputed car and housing allowaces would amount to $60K a month.

The present monthly salary is $100K a month. The 'durian to durian' salary for comparison is thus around $40K a month until the recent increase. Of course, they get bonuses which are not given in other countries.
Alan