REPORT OF CIVIL SERVICE - SALARIES COMMISSION - OF SINGAPORE, 1967 - (Statement by the Minister for Finance)
Mr Speaker, Sir, I would like to set out the views of the Government on the Report of the Salaries Commission which is now tabled before Parliament. The Government accepts most of the principal recommendations of the Commission. It also accepts most of the recommendations in regard to less significant matters. But before I set out the Government's position in detail in regard to recommendations of the Commission, may I first deal with the general background against which the recommendations of the Commission have been considered by the Government. First, it is clear that the present time is not the appropriate moment to introduce a general increase of emoluments payable to the civil service. Nor has the Commission attempted to do this except for Division I posts. There are grave problems ahead for all of us following upon the withdrawal of the British military presence planned for the end of 1971. My colleagues and I have commented on this subject on innumerable occasions in the past, but because of the crucial nature and the magnitude of these problems, they will bear repetition. The first impact of British military withdrawal will be a substantial increase in the volume of unemployment. This is known to everybody, but what has not been emphasised is that it is not merely the number of unemployed that will go up. There will also be a change in the nature of persons unemployed. Hitherto, the bulk of unemployed - in fact, more than three-quarters - are teenagers or youths of 20 or 21 looking for their first jobs. It cannot be said that extensive unemployment among teenagers and youths, however regrettable it may be from other viewpoints, imposes acute hardship on these unemployed, for they will be living with their parents and at least will have their regular supplies of the necessities of life - food, clothing, shelter and so on. But in the case of unemployment of laid-off base workers, the majority will be the prinicipal bread-winners of their families. Prolonged unemployment will cause distress not only to the unemployed; such distress will extend to their dependants, including, of course, their children. This gives a new twist to the problem of unemployment, grave and difficult though it already is. In recognition of this fact, the Government has introduced legislation whereby lump sum benefits payable to laid-off workers will be paid into a Central Fund from which monthly payments will be made to ensure that the imprudent do not squander the capital sum in a spending spree. But these are palliatives. The solution is to get them new jobs and if need be, to train them for new jobs. I will not deal with the steps which Government is taking in various fields to meet this challenge to our economic stability. I need only emphasise what my colleagues and I have been saying all these months. The crucial years ahead will demand from everyone a considerable degree of exertion and even sacrifice. It will be a long and difficult period, but if we can see through the years up to 1973 or 1974, with our economy on an even keel, we can then look forward to a resurgence of growth and prosperity after that. These difficulties were not foreseen in 1967 when the Commission under the chairmanship of Mr G. J. Harvey entered into their lengthy deliberations on the salary structure and conditions of service in the civil service. This, of course, was not their fault, but nevertheless their recommendations must be considered in the light of changed circumstances. The principal and perhaps the most valuable work of the Commission relates to variable allowances. The Commission has recommended that the time has arrived to abolish variable allowances. The Commission arrived at this view on the basis of two considerations. First, the permanent pensionable pay of civil servants should be based on long-term considerations, but in times of instability, it is necessary to add a temporary, non-pensionable, addition to this pay. Second, wages and salaries should depend on services rendered and not on the marital status of the employee. In other words, the rate for the job. The Commission, taking into account the stability in the cost of living since 1961, considered that retention of variable allowances is not justified, nor should marital status of an officer decide how much pay he or she should get. Accordingly, the Commission recommended that the whole of variable allowances be consolidated into basic pay. This would mean an increase in the pensionable emoluments of civil servants. It will also mean an increase in the annual cost of pensions which is estimated at $1.3 million a year. The Government accepts this recommendation of the Salaries Commission. I want to stress that it is not an exercise in general pay increase but of consolidating a temporary allowance into total pay. The Salaries Commission further recommends that officers transfer into the new salary scales on the basis of their present total pay. The Government does not accept this recommendation. No doubt the Commission was moved by considerations of economy in requiring that officers of different marital status should enter at different points in the new salary scales. The Government is of the view that in this consolidation exercise, since the purpose is to remove anomalies arising from marital status, conversion should be calculated without the limitations imposed by marital status. This will result in an increase in total emoluments payable to women officers, bachelors, and married officers without children. The additional cost is estimated at $¼ million a year. As part of the consolidation exercise, the Commission has streamlined the general salary structure. The number of salary scales has been reduced. For instance in Division I, the existing 34 salary scales have been replaced by six basic scales and 22 scales which are segments or parts of the basic scales. In Division II, the existing 44 salary scales are replaced by 14 basic scales plus 13 scales which are segments or parts of basic salary scales. A similar tidying up takes place in respect of Division III and Division IV salary scales. In the case of Division IV salary scales, the process of tidying up has benefited, perhaps quite adventitiously, the holders of a large number of pasts. I shall refer to this subject at a later stage. The Government accepts the general replacement of existing scales in the new salary structure subject to modifications in respect of particular salary scales with which I will deal in detail when I come to them. The Commission made recommendations in respect of salaries. These recommendations fall into three groups. First, the Commission, after weighing representations made by staff associations or staff representatives, recommended increases in salary scales of specific posts. Second, the Commission recommended a general increase in Division I salary scales and in all Superscale posts in that Division. Third, the Salaries Commission drew attention to the inadequacy of salary scales of the technical grades, though it made no recommendations in this respect. I will deal with each group of recommendations in turn. The first deals with certain specific salary scales. These relate to the following: -
(i) The Medical Ancillary Service and the Nursing Service; (ii) The Library Service; (iii) Honours and Pass Graduates in the Education Service; (iv) Guard and Escort Unit, the Airport Auxiliary Police; (v) Fire service. In respect of the Medical Ancillary Service, which comprises Almoners, Dieticians, Occupational Therapists and Radiographers, the Commission did not consider the Executive Officers salary scale, on which they are now placed, the right one and recommended an improved scale. The maximum of the recommended salary scale, which is $925 p.m., is higher by about $40 than the all-in salary scale at the maximum of the present scale. Similarly, the Commission did not consider that the Nurses salary scale should be related to the salary scale of Clerical Officers, and also recommended an improved scale. In the case of Nurses the maximum on the scale is about $48 per month higher than the present all-in maximum. An increase at the maximum of $36 has also been recommended by the Commission for Assistant Nurses and Midwives. The Government accepts in full the recommendations on improved salary scales for the Medical Ancillary Service, Nurses, Assistant Nurses and Midwives. It is also proposed to accept the improved gradings for the posts of the Library Service of Director, Deputy Director and Librarian and the improved salary scales for Higher Library Officers and Library Officers as recommended by the Commission. The salaries payable to the Director, Deputy Director and Librarian will be those appropriate to the grades as recommended, which will be different from that actually shown in the Report in view of the decision of Government not to increase salaries in Division I. The Commission recommended that the salary scales of Honours and Pass graduates in the Education Service be improved. They recommended a new salary scale for each of the grades of graduates on the basis that Division I salary scales will be improved. The Government accepts the recommendation of the Salaries Commission for improvements in salary scales of Honours and Pass graduates in the Education Service relative to the general run of salary scales. Since Government is not accepting the recommendation of the Commission for a general increase in Division I salary scales, the improvement in salary scales in the Education Service will take this into account. A differential of $150 a month is observed throughout the length of the scales of Honours and Pass graduates in the Education Service. For Honours graduates the salary scale will be as follows: - $700x50-800/850x50-l,250/ 1,300x50-1,500 For Pass graduates the salary scale will be $550x50-650/700x50-1,150/1,200x50-1,350. The Salaries Commission recommends the following salaries for Teachers-in-Training who are Non-Graduates. For four categories of Teachers-in- Training, that is, the School Certificate Teachers-in-Training, Technical Teachers-in-Training, Domestic Science Teachers-in-Training and Mixed Farming Teachers-in-Training, for these four grades they recommend a pay of $l90xl0-2l
0. For Higher School Certificate Teachers-in-Training $295: $315; for Craft Trainee Teachers-in-Training $335; for Teachers-in-Training with a Technician Diploma $425: $445: $465. For Trained Teachers, who are Non-graduates, the Commission recommends a common salary scale of $295x20-335/385x20-505/560x25-660/750x35-925 p.m. into which all non-graduate trained teachers would be offered the option to convert. This new salary scale is based on the new Teachers' Training College trained teacher's scale with an additional increment. The Government accepts this recommendation. Where teachers refuse the option offered they will be allowed to remain on the existing salaries with variable allowance personal to themselves. The Commission is of the view that there should be no distinction between members of the rank and file of the Regular Police Force, the Guard and Escort Unit and the Airport Auxiliary Police Force, and recommends that the three Units should be placed on the same salary scales and they should receive the same training. These recommendations are not accepted. The whole object of having a Guard and Escort Unit is to have a less expensive force to perform simpler duties which require simpler training. The same is true of the Airport Auxiliary Police Force. In respect of the Fire Service, the Commission recommended that so far as the subordinate staff are concerned, i.e., Leading Firemen and Firemen, those employed in the Singapore Fire Brigade and their counterparts in the Airport Fire Section should be on the same salary scale. The Government accepts this recommendation. Pending a review of salary scales by a future Salaries Commission, which it recommended, the Industrial Arbitration Court made certain interim awards in respect of outstanding cases before it. The awards are as follows: (1) Midwives: (a) Pupil Midwives: Temporary Allowance of $6 p.m. after the first year of training; (b) Staff Midwives: Temporary Allowance of $12 p.m. (c) Senior Midwives: Temporary Allowance of $15 p.m. (2) Timescale Clerks in the Postal and Telecommunications Department: Interim Allowance of $15 p.m. (3) Customs Officers: (a) Customs Officers: Interim Allowance of $10 p.m. (b) Customs Officers: Interim Allowance of $15 p.m. Senior Grade. Since these interim allowances were awarded pending the establishment of new salary scales for the grades concerned by the Salaries Commission, it is logical that these allowances should disappear as and when the new salary scales are implemented. In respect of Midwives and Timescale Clerks in the Postal and Telecommunications Department, the Commission made this clear, when it recommended that these officers should transfer to the new salary scales recommended for them without the addition of this interim allowance. Although the Commission is silent in respect of Customs Officers, it is logical to infer that the same principle of conversion should apply to them. Where officers prefer to retain the interim allowance, they will be permitted to do so but they will have to remain on the unrevised scales with variable allowance personal to themselves. The Commission found the present schemes of service for the Technical Grades to be inadequate and unsatisfactory and recommended an examination and re-organisation of these services. This recommendation is accepted and it is proposed that this review be conducted by an ad hoc Committee comprising the Deputy Secretary (Establishment) as Chairman, and representatives from the Telecommunications Department, Public Works Department and the Broadcasting Department, all of whom should be technical personnel, as members. This Committee could be asked to examine and recommend a suitable structure for the technical grades and the appropriate salary scales for these grades. I referred a moment ago to Division IV grades. The Commission considered the existing scales which have annual increments varying from $2 per month to $8 per month to be unrealistic. The Commission considered that increments on the salary scales should be of meaningful size and in the new scales for Division IV, the increments range from $5 to $15. Most of the recommended salary scales for Division IV show some increases at the maximum. The Government accepts this recommendation of the Salaries Commission. The Government proposes to go further than the Salaries Commission in respect of Division IV salary scales. Hon. Members know that contributors to the Central Provident Fund will, in the course of the next few years, receive additional benefits by way of enhanced contributions to the Fund by the employer. In effect, this means that the Government's daily-rated workers as compared with the monthly-paid pensionable employees will enjoy additional benefits, which will total 5 per cent of their pay. Employees of private firms contributing to the Central Provident Fund will also receive these benefits. The Government considers that pensionable employees in Division IV salary scales and promotion posts attached to Division IV salary scales, should receive an increase of approximately this proportion, in instances where the revised salary scales have not given these increases. I now come to the recommendations for general increase in Division I salary scales and in Superscale posts. The Commission reported that "it was the general view of both private and official witnesses that the current level of remuneration and other service conditions relating to Division I Superscale Officers, including Permanent Secretaries, Heads of Departments and Specialist Officers at these levels were not sufficiently competitive in relation to salary and conditions of service obtaining in the private sector". The Commission were satisfied that this general view was correct, and taking all the evidence into account, they were satisfied that there was a case for an increase in the pay of the higher civil servants, and recommended salary increases for officers in the Superscale grades as follows: Superscale Grade C: an increase in existing all-in pay of $2,350 a month to $2,750. Superscale Grade D: an increase in existing all-in pay of $2,170 a month to $2,500 Superscale Grade E: an increase in existing all-in pay of $2,070 a month to $2,350. Superscale Grade F: an increase in existing all-in pay of $2,020 a month to $2,250. Superscale Grade G: an increase in existing all-in pay of $1,920 a month to $2,150. This represents increases ranging from $230 p.m. to $400 p.m. at the top. The Commission commented that most of the witnesses who appeared before the Commission stated that fringe benefits, such as free cars, interest-free loans for certain specific purposes, entertainment allowances, etc., for senior staff were more favourable in the private sector. The Commission had no doubt that fringe benefits were considerable and attractive in the private sector, but felt that the present differences between the civil service and the private sector in this matter had to be accepted. In respect of the Administrative Service, the Commission reported as follows: 'The evidence we received from the private sector on salary scales paid to their middle Executive Grades covering a wide variety of occupations indicated that the salaries paid to Administrative Officers in Government during the first 3 years of their career compare favourably with those of their counterparts in the private sector, but that thereafter salaries in the private sector are bigger than those paid for Administrative Service Officers.' Also, most witnesses "agreed that industry and commerce nowadays offer better and more opportunities for advancement for a good Honours Degree graduate than exist in the Civil Service". In the light of this evidence, the Commission recommended additional increments at the maximum to the salary scale for Administrative Officers. It is with regret that I have to inform the House that the recommendations of the Salaries Commission in respect of Superscale Officers and Division I Officers are not acceptable to the Government. Salaries of Superscale Grades will remain the same as at present, except that variable allowances will be consolidated into pensionable pay. For the Administrative Service the Commission recommended a scale as follows: - $800 x 50 - 900/950 x 50 - 1,050/1,200 x 50 - 2,000 p.m. The Government proposes the following scale : - $900 x 50 - 1,000/1,050 x 50 - 1,400/1,450 x 50 - 1,850 p.m. Related salary scales in Division I will follow a similar pattern maintaining approximately the same differential with the Administrative Service Scale. Details of all salary scales and method of conversion will be set out in a forthcoming Treasury Circular. When the whole country is being enjoined to put in additional effort without thought of recompense, this is not the proper moment to introduce a general increase in the pay of top civil servants, however much they may deserve it. At the same time, it is necessary that the Government takes certain action to ensure that there is no drift of the best talent in the civil service into private enterprise. Government proposes to achieve this by two measures. First, to carry out more frequent promotion exercises. There is a large number of posts in the civil service establishment which are not substantively filled in the upper echelons of the service. This is because of the policy of the Public Service Commission to promote only officers of outstanding merit. Everyone will agree that this policy of the Public Service Commission is a sound one. Nevertheless, nearly 10 years have passed since the Malayanisation exercises were completed. University graduates recruited into the civil service since then and others promoted from the ranks into the Administrative Service have by now ample time and opportunity to demonstrate their worth. This may be the appropriate occasion to carry out an extensive promotion exercise. In this way, the meritorious will be rewarded without recourse to a general increase in salaries which will benefit both the outstanding officer as well as those not deserving of reward. This policy has its limitations. Officers on the top ladder, i.e., the Permanent Secretaries, occupying substantive posts on Superscale 'C' cannot climb further. Therefore, it is necessary to revise the structure of the top Superscale posts. The Government proposes to introduce two Superscale posts. Superscale 'B' with a total pay of $2,700 a month and Superscale 'A' at $3,000 a month. Substantive holders of Superscale 'C' appointments will be considered in the forthcoming promotion exercise for promotion to Superscale B and A. The introduction of these Superscales B and A would mean that the salary structures of the top echelons of other services, for example, the Judicial Service and some senior appointments outside the normal ranks of the civil service, such as the Chairman of the Public Service Commission, will have to be revised. In respect of Medical and Dental Officers, the Commission recommended as follows: 'While it is reasonable in our view to have some regard to the standard of remuneration of general practitioners and consultants in private practice, we think that the type of work and conditions of employment of those in the private sector differ materially from most of those employed in the Government service. The pattern of the working life of a private practitioner is entirely different from those performed by Government Medical and Dental Officers.' Nevertheless, it was the opinion of the Commission that "there is considerable weight in the arguments mentioned above for improved salary scales for Medical and Dental Officers in order to attract and retain officers in the Service". For these officers, the Commission recommended salary scales which provide for a substantial jump after the bar in the third year of service. Government does not accept this recommendation of the Commission. The shortage of doctors and dentists which doubtless induced this recommendation of the Commission has come to an end, and doctors and dentists in the Government service will convert in the normal way to the new salary scale of $1,100x50-1,400/1,450x50-1,850 p.m. The Commission expressed the opinion that the present quantum of Specialist Allowance fixed in 1958 needed revision. Specialists in the Government medical service represent a group of highly qualified and experienced personnel who are responsible for the maintenance of high standards of medical practice not only in Government service but outside it. Evidence was given to the Commission that the personal emoluments did not provide a sufficient incentive for these officers to remain in the Government service. The Commission recommended that the existing rates of Specialist Allowance for Medical and Dental Specialist should be increased. They further recommended that the existing classification of Specialist into the categories of Clinical. Non-Clinical and Administrative Specialist be reduced to two categories of Clinical Specialists with the same allowance and Administrative Specialists. For Superscale G Specialists, the allowance of $250 p.m. for Clinical Specialist and $200 p.m. for Non-Clinical Specialist should be raised to $500 p.m. In respect of Superscale E, the allowance of $500 for Clinical Specialist and $350 for Non-Clinical Specialist should be raised to $750 p.m. No increases were recommended for the Administrative Specialist in Grades G and E, but the allowance for the Administrative Specialist in Superscale C has been recommended to be raised from $200 to $500 p.m. Government accepts this recommendation except in respect of Administrative Specialist posts in Superscale C. The question of Specialist pay for Administrative Specialists in Superscale Grades G and E needs to be further considered. The Commission has made no recommendations for increases in these grades. This may lead to difficulties in that a. Specialist on posting to an Administrative position will suffer reduction in pay. As a result of this policy, Administrative positions in the Medical Service may be held by the less meritorious so far as medical skill is concerned. Of course, no one will argue that Administrative skills and Medical Specialist skills go together. Nevertheless, the virtual exclusion of best specialist skills from making any contribution to administrative efficacy is disturbing. There is the added complication that if doctors performing administrative functions in Grade G and E posts were to get very substantial allowances, as compared with their counterparts in the Administrative Service, they would, in fact, be getting more pay for doing the same type of work. The Ministry of Finance and the Ministry of Health are working together to find a mutually satisfactory solution to this very tricky problem. The Commission recommended that where an officer is acting in a post because it is vacant and not because the incumbent is on leave, he should draw acting allowance of the full difference in salary up to a maximum of $250 a month. The Government accepts that acting allowances should be increased to two-thirds of the difference in salary up to a maximum of $250 a month as against half the difference and a maximum of $200 p.m, at present. It does not agree to the full difference being paid on the grounds that if an officer is considered fit to receive the full difference he should have been promoted substantively. Another reason is that many officers act in higher posts as a result of pure chance simply because they happen to be on the spot and not because of proven merit. The Government does not accept the recommendation of the Commission that an officer with 20 years' pensionable service should not lose his pension entirely if he were to be dismissed on disciplinary grounds. The Government accepts the recommendation that an officer retired in the public interest should retain some of his pension rights. The Government also accepts the recommendation of the Commission that benefits payable in respect of injury or death arising in the course of duty should be improved. Government does not accept the recommendation of a scheme to provide for widows and dependants of pensioners in view of the fact that the Widows and Orphans Pension Scheme, which provided for this, was unpopular and was abolished as a result of representations from staff unions. As regards retirement benefits, the Commission made far-reaching recommendations on changes to the Pensions Rules. It noted that it would not be practicable to offer provident fund benefits in addition to the pension scheme. The Commission also expressed the opinion that the quantum of pensions payable under present regulations is adequate. However, the terms of eligibility, in its opinion, are too rigidly determined by the present Pensions Ordinance. It recommended a more flexible system. In particular, it recommended that a pensionable officer who leaves the service after 20 years of pensionable service should not lose his entire pension, even if he has not reached the age of optional retirement. Government accepts the need for more flexibility in the present Pensions Ordinance. It does not accept the recommendation that officers with 20 years' service should retain some pension rights on leaving the service prematurely. The Commission has not made any recommendations in respect of quantum of pensions to he retained in such instances, it is difficult to decide on this. If the quantum were fixed at too low a level, the new benefits may well be regarded as derisory. On the other hand, any substantial concession on this point may lead to an undesirable exodus of talent from Government employment into the private sector. Accordingly, the Government has decided that, subject to the approval of the President acting on the advice of the Cabinet, officers with 20 years of pensionable service may be retired on full pension rights without recourse to disciplinary proceedings as administered by the Public Service Commission in the case of retirement in the public interest. This will enable Government to retire officers whose continued employment would be of no advantage to the service without reducing the market value of the officer in his search for employment in the private sector. The Commission covered a wide field and made recommendations on a large number of detailed points. For instance, it recommended that a Pay Research Unit be established to undertake a continuous study of relative pay in jobs within the government service and between government service and the private sector. It made recommendations on translators fees, medical benefits, rentals paid by government employees, privileges of free supply of electricity and water and on numerous other matters. It will not be appropriate for me to enter into each and every recommendation. These will be described in a Treasury paper which will be issued shortly. In most instances, the recommendations of the Commission have been accepted. In some, further studies are needed before a decision can finally be made, and in a few instances the recommendation of the Commission has not been accepted. A general review of pay and conditions of service of the whole civil service is a complex and major undertaking, bearing in mind that the Government employs more than 50,000 employees. Implementation of these proposals or amendments of them will constitute a major administrative exercise. I have indicated the Government's position in respect of the major recommendations of the Commission. It should be noted that the Government has not accepted any salary increases except those recommended for a few specific grades, i.e., the Medical Ancillary Service, the Nursing Service, Midwives and Graduate Teachers. The Government agrees to the recommended improvements for these officers because they have been made by the Commission after a very careful study and are considered justifiable based on their relationship with other grades in the civil service. Where the Commission's recommendations are accepted, I do not expect much difficulty in having them implemented. Where Government has decided at present not to accept the recommendation of the Commission, an opportunity will be given to trade unions, staff associations and others affected to make representations to the Treasury or to the appropriate Ministry before a final decision is taken. All representations will, of course, be given due consideration. A final review of the position will be made later this year. When this review has been made and a final decision taken, implementation will be proceeded with. It is proposed that all recommendations accepted by the Government and all proposals confirmed or amended subsequently will take effect as from the 1st January, 1969. Though not covered by the Report of the Salaries Commission, it will be necessary to revise the salaries and pay structure of the Armed Forces in view of the intention to accept the new salary structure for the civil service.