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Dr James Chin
If there is one thing that gets a Singaporean hot under the collar, it's the issue of money. In a depoliticised society where social status is equated with wealth and education levels, the wide disparities in salary levels are among one of the few areas where the government has been losing political ground in the past decade.
One particular area is the pay level of ministers and senior civil servants. Singaporean ministers and senior bureaucrats are among the highest paid in the world (if not the highest based on population). The rationale, according to the government, is simple: if you want the best people to enter politics and the civil service, you must pay the market rate or close to it. High calibre individuals should not have to sacrifice in monetary terms to enter politics or the civil service to serve the people. Singapore's miracle economic performance was due in part to the very talented people it managed to recruit to run the island in the first place, according to the argument. Moreover, paying key people well, will deter the need for corruption. In addition, the right policies pursued by these people will pay off handsomely as their brain power will ensure that Singapore retains its edge over its neighbours.
In practice, this means that a recently announced pay rise will bring the prime minister annual salary to S$1.94 million - up 14% from S$1,699,000, ministers from S$861,000 to S$986,000 and junior ministers to S$968,000. Allowances of Members of Parliament were also raised from S$9,100 to S$11,900 a month, an increase of 30%. Young officers in the administrative service, high-flyers who reach Superscale G at age 32, will see their pay package jump 50% from S$242,000 to S$363,000. These compare with the general increase of 13% for Singapore's 66,000 rank-and-file civil servants.
The opposition, faced with few issues for the past few months, could not have been happier. ‘What about the spirit of public service’, they cried They also happily pointed out that Bill Clinton is paid less than one-third of What Goh Chok Tong receives, and in the words of a Singaporean, ‘Bill Clinton rules the world and Goh Chok Tong rules a dot! How can they explain that he's paid so much less than our own PM?’ Even the pro-establishment Straits Times' survey showed that 55 per cent of those surveyed said the pay hike, especially for ministers, was ‘not fair’.
Critics also pointed out that the normal workers had not seen the restoration of cuts in Central Provident Fund contributions, 20% to 10% (2% has since been restored), imposed during the Asian economic crisis. On top of that, tens of thousands of lower-skilled, older workers are still out of work or gradually being retrenched because Singapore is falling out of favour in many old manufacturing businesses or simply getting too expensive compared to its neighbours.
Despite all the public indignation, the government went ahead with the pay rise. Senior Minister Lee Kuan Yew had the last word: ‘If Singapore does not have high calibre ministers, our economic growth will stumble and social problems will increase’. In other words, other countries have not done it, but Singapore could not afford not to. But the pay-rise controversy will surface again next year when a new round of pay hikes is announced by the PAP-led government.
WATCHPOINT: Don't expect public opinion, no matter how negative, to change the policy of paying the ruling elite the ‘market rate’.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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