SALARY REVISION FOR POLITICAL, - JUDICIAL AND RELATED APPOINTMENTS - (Statement by the First Deputy Prime Minister)
Mr Speaker, Sir, the Minister for Trade and Industry announced the salary revision for the Civil Service last Friday. Along with it, the Government has decided to revise the salaries of political, judicial, and other statutory appointments. I shall deal first with the political appointments which include the Prime Minister, Deputy Prime Ministers, Ministers, Ministers of State, Parliamentary Secretaries, Political Secretaries and Members of Parliament. Need for the best to form the Government There are 81 Members of Parliament, excluding the Non-Constituency MP. From them, we appoint the Prime Minister and other Cabinet Ministers. Presently, the Cabinet has 13 Ministers. These 13 men are responsible for policies which affect every aspect of our lives. Their decisions determine what kind of homes we live in, what kind of education our children have, and whether we receive good medical treatment should we fall sick. Their economic and financial policies affect our job, and our take-home pay. Their effectiveness in maintaining security and upholding law and order enable all of us to sleep soundly at night. Their foresight and judgment and their ability to solve acute problems, both long term and immediate, determine our future. If we want the right decisions to be taken for Singapore, we must continue to get the right people to do the job. Let me illustrate this with a simple example. Almost every Singapore family has savings in the CPF. Our total CPF savings amount to a colossal $33 billion. To let you understand what this size means, let me give you their equivalent of housing units. This sum of money can buy 626,000 4-room type HDB flats, at a price of $54,000 per flat. This is equivalent to our being able to buy all the HDB flats that have been built so far by the Government. Suppose we have an incompetent, dishonest, spendthrift, Government. They may fail to attract investments, and then economic growth will falter. They will not balance the budget year after year, and we have to dig into the reserves. They may invest the reserves unwisely or they may dip their fingers into the till, as Marcos did in the Philippines. Then, your CPF savings will be devalued, or even wiped out, long before you can get them on retirement. Every Singaporean has a vested interest in making sure that the honest and the able stand for elections and that the best of them form the government. Every one of Singapore's Ministers must come from the top of their cohorts, not just academically- although this is definitely useful-but also in proven performance. At each General Election, we need 15 to 20 new Members of Parliament, just to replace those who are getting older. Amongst the new MPs, we need two or three who will make good Ministers. These two or three must be amongst the best in Singapore, in terms of ability, character and motivation. They must have the intellectual and moral calibre to govern Singapore. About 50,000 babies are born each year. We are looking for two or three Ministers every five years, which means in between elections we are looking for two or three Ministers out of an election cohort of a quarter million Singaporeans - 50,000 times five. That means we are looking for that one man in every 100,000 Singaporeans. When it comes to the Prime Minister, we can count ourselves lucky if we can produce one in every 10 or 20 years! By dint of enormous effort, we have succeeded in building a small team of Ministers, just a small team. I can say that nearly every Minister in the present Cabinet was among the top 50 students of their year. So were many of our MPs. Many of the Ministers were, in fact, President Scholars, which means that they were among the top 10 of their year. Let me give you some names. Dr Yeo Ning Hong- he was one of the nine State Scholars (this was the predecessor to the President Scholarship); Lee Yock Suan- one of nine President Scholars in 1966; Mah Bow Tan-one of seven President Scholars in 1967; Lee Hsien Loong-one of eight in 1970; George Yeo-one of 11 1973. And they were at the top of their class in the best universities, competing against the best in UK and, in some cases, Australia. Difficulties of Recruiting Political Talent We need more Ministers like them, more at each election. But such men are increasingly difficult to recruit. I know the difficulties because I have been talent scouting for the Government ever since I was elected in 1976. Those whom we want in the Cabinet are invariably successful people. If they were not successful, why should we want to invite them to join us and enter politics? Unfortunately, successful Singaporeans are seldom eager to enter politics. That is a fact of life in Singapore. They do not believe that the future of Singapore depends on their being in politics. They are content to leave the country in the hands of other honest and capable people so that they can follow their own private careers in peace. They know that however successful they may have been in their careers, going into politics is a risk, the risk of failure to meet a challenge of an altogether different kind. Because even if they can manage a Ministry well, they may not be able to handle the sensitive political issues dealing with people's lives, their hopes and fears. The brighter they are, the more clearly they understand that to succeed they must have that feel for people, that ability to sway people and galvanize them into action, that something called political leadership. Putting aside any loss in salaries, why should they give up the certainty of a good career and a good future in a profession, or a bank, or a big company or the Civil Service, for the uncertainty of ministerial office? Why should they give up their privacy and subject themselves to the glare of publicity? Why should they spend more time with voters when they need the time to spend with their families? Why should they be called upon when others can do it? Why should they do it when others are running the government so well, and they, like everyone else, are enjoying the fruits of economic progress? Examples of Reluctant Politicians Do you know how many times I had to see Dr Richard Hu, Wong Kan Seng, George Yeo, Mah Bow Tan and Seet Ai Mee before they said "yes"? At least three times each, and over many months. I remember Richard Hu seeing me in my office, looking thoroughly miserable, and I was looking just as miserable because I was not able to get good men (this was in 1984). I told him I needed a Finance Minister. He said, "But you have got Dr Tony Tan." Dhanabalan, and Dr Goh Keng Swee were still around at that time. I then explained that Dr Tony Tan, then Finance Minister, would be needed him to run the Education Ministry. I think Dr Tan was the Finance Minister at that time. Then, it dawned upon Dr Richard Hu that Dr Goh Keng Swee was retiring because I talked about Tony Tan going over to the Education Ministry.And I think that gave him little choice. He said "yes". He realized I could not just find a Finance Minister in 1984 to take over from Dr Tan. Dhanabalan was required in the Foreign Ministry. I got them to say "yes"-Dr Richard Hu, Wong Kan Seng, and the others because I persisted and appealed to their sense of duty, duty to their fellow citizens, to their friends and relatives and to their own family. They did not volunteer to serve. They were called up. They finally agreed because of a sense of service to the nation. Evenif we had paid them more than what they were earning, they would still not have come in without intense persuasion. It is therefore necessary to minimize the sacrifice that a person is asked to make, and minimizing the financial sacrifice is the least we should do. Peter Sung was persuaded to stand in a different way. Dhanabalan recruited him. Dhanabalan asked Peter Sung in 1984; Peter declined. Then Peter was sent to the Philippines as our Ambassador. Whilst he was in the Philippines, he realized that if good men did not come forward to serve, the country would go down. So when Dhanabalan approached him again in 1988, Peter said yes. Although I am a persistent person when it comes to talent scouting for the Government, I have not always been successful in recruiting good candidates. For example, there is a young man out there in the private sector who would make a top-rate Minister. He works for a multi-national company. I failed to persuade him to stand in the last General Election. I must have tried over half a dozen times, but he stood firm. One of the reasons was the heavy sacrifice this would mean to his family life. He does not like publicity, and neither does his wife. And they saw no reason whatsoever to forgo privacy for the family. But another reason why he was reluctant was because he was locked in by his company's stock option scheme. And he would have lost several hundred thousand dollars had he resigned to stand for elections. Why should he resign? Why should he? I do not blame him for saying no. But I have not given up yet. I am going to send Peter Sung to see him and bring him to the Philippines, if necessary. I also failed to persuade a public accountant to stand as a candidate for elections to be a Member of Parliament. He works in an international firm. His firm disallows its employees to take part in politics, as a matter of policy. To contest the elections, he had to resign and forgo an annual income of over half a million dollars. It did not make sense to him or to me that he should resign just to be a Member of Parliament. The sacrifice is simply too great. Rationale for Salary Revision People who enter politics in order to get rich are unfit to be Ministers. Let me make that quite clear. If you think that the salary is so attractive that you want to be a Minister because of the salaries, you are unlikely to pass our screening test. We are not interested in people who come into politics because of what they perceive as a handsome salary. But why should we require able Singaporeans who are fit to be Ministers to make a large financial sacrifice in order to enter politics? If we demand this of them, why should able men enter politics at all? If Singapore is to continue to have able men in Government, we must at least ensure that after having sacrificed their privacy, leisure and family time, such people do not also have to make too large a financial sacrifice. This is the rationale for the current salary revision. Salary Revision of Political Office-Holders Salaries of political office-holders were last revised in 1981. But because of rapid economic growth, they still lag well behind incomes in the private sector. I shall now ask the Clerk of Parliament to circulate a table which I call Annex A*. It is the same table which was released when the Civil Service Pay Revision was announced last week. But I think it is useful to refresh your memory. [Copies of table circulated to Members]. The table shows typical salaries of top executives and professionals in the private sector in 1987. If you look at the table, you will notice that not only are these numbers much larger than civil service salaries, they even exceed the salaries of Ministers. This disparity will make it harder for us to recruit men and women of ability and integrity into Government, and to maintain the quality of political leadership. This is the reason for adjusting the salaries now. Structure of Salary Revision I shall now deal with the structure of the salary revision. The components of the salary revision parallel those for Superscale officers in the Administrative service, namely: (a) Higher salary grades for each appointment; (b) A half-month increase in the existing end-of-year non-pensionable variable bonus, bringing it to 1ª months; (c) A new discretionary non-pensionable performance-based bonus of up to two months of salary; and (d) Promotional grades for Senior Parliamentary Secretaries, Ministers of State, Senior Ministers of State and Cabinet Ministers. Higher Salary Grades Now I shall ask the Clerk of Parliament to distribute Annex B (Cols. 833 - 834). Annex B gives the details of the new basic salaries. Salaries of political office-holders are expressed in terms of Civil Service Superscale and Staff Grade points. The Government will now attach higher grades to the various appointments. For example, let us look at the Ministers. Ministers are now on Staff Grade I plus 5%. They will move to Staff Grade II plus 10%. In addition, the new grades will carry the revised Civil Service basic salaries, so that they will be worth 7% more than before. You remember that the Superscale Civil Service salaries were revised by 7%. These two changes will increase the basic salaries of the various posts. Annex B - MONTHLY SALARIES (Cols. 833 - 834) We have raised the grades for Ministers, and this will give more room for promoting civil servants. By creating the new Staff Grades IV and V, we will preserve the existing correct relativities between top civil servants and political posts. After the revision, a Staff Grade V Administrative Officer will earn more than any Minister except the Prime Minister, just as a Staff Grade III officer does today. In other words, we are retaining the relativity. In percentage terms, this increase in basic salaries may appear to be large. But in spite of this increase, Ministers' salaries will still be modest compared to the professions listed in the table which I handed out earlier, Annex A. A Minister's revised monthly salary at $22,100 basic, which when you gross up becomes $28,644, including NWC, is less than the top incomes in any of the professions in Annex A. Even the Prime Minister's revised salary at $38,275 basic, which when you gross up becomes $49,608 per month, will still be far less than what a top doctor or lawyer can earn, and no more than what the Chief Executive Officer of a large local manufacturing company can expect. Top doctors earn on average $93,000; top lawyers over $100,000 per month. So the Prime Minister's salary falls far behind them. Variable Bonus On variable bonus, political office-holders will get the same additional 1/2 month of variable bonus. This, of course, depends on the state of the economy, just like civil service salaries on the variable bonus. Performance Bonus We have introduced a performance bonus for Superscale civil servants. Ministers, Ministers of State, Parliamentary Secretaries and Political Secretaries will likewise receive a performance bonus of up to two months of salary, varying from individual to individual, like the Superscale officers in the Administrative Service. The Prime Minister will receive the full two months as a fixed arrangement. He will decide how much each Minister, Parliamentary Secretary and Political Secretary should receive. And his decisions will be kept confidential. So would the amount paid to each person. Promotional Grades Now I come to promotional grades. The Government has also decided to create promotional grades within the ranks of Senior Parliamentary Secretary, Minister of State, Senior Minister of State and Minister. Why are we doing this? It is because promotion from Parliamentary Secretary to Minister of State, Minister and upwards is a route which few can take. The leaps in responsibility are just far too large. Promotion grades within each rank allow us to reward a Parliamentary Secretary or Minister by promotion to a higher salary grade when he does his job well. Despite providing for promotion grades, let me say that a political career is not iron-clad. It is fraught with the vagaries of the ballot as well as the risk of making political blunders. In other words, you cannot plan on the basis of a steady career or progression in your career in the political service. But promotion grades will allow us to reward those who continue, and contribute, in office for many years. Now I shall deal with the details of the various grades. Senior Parliamentary Secretaries First, Senior Parliamentary Secretaries. Senior Parliamentary Secretaries are presently on Grade E. This will be revised to E1, and an additional grade point of D will be added. Ministers of State The Minister of State grade is currently Superscale Grade C, and the Senior Minister of State is Superscale Grade B. There will be three grades for Ministers of State: D1, C and B; and three for Senior Ministers of State: B, A and Staff Grade I. The overlap at Grade B is a transitional arrangement. These additional grades, especially the higher grades for Senior Ministers of State, will enable office-holders to have a full political career without necessarily becoming full Cabinet Ministers. Such men can make important contributions at the Ministry level, managing complex departments and making operational decisions requiring long experience and intimate knowledge of their field. We need more such people to reinforce our team. Hence the provision of promotional grades for them. Ministers Ministers will move from Staff Grade I plus 5% to Staff Grade II plus 10%. There is also a promotional grade for Ministers. The promotional point will be Staff Grade IV. Ministers will be appointed to the higher grade on a personal basis. Ministerial responsibilities differ considerably in scope. Those carrying heavier portfolios should be paid more. The higher point will enable us to recognize this and pay them properly without having to move up the salaries of each Minister. We will not be attaching new appointment titles to the new grades. There will be no difference in title or address between those on the higher and lower grades, whether they are Ministers, Ministers of State, or Senior Parliamentary Secretaries. In other words, we will continue to address a Minister a Minister even though he is on a higher grade. We have the term "Senior Minister" but this term will continue to be reserved for special individuals, like Mr Rajaratnam. Conversion After this revision, all current appointment holders will be placed onto their corresponding new grade points. I do not intend to promote any Minister, Minister of State, or Parliamentary Secretaries to the higher grades immediately. I will do so only later, when I judge it necessary. Make-up Pay for Ministers Even with the higher salary grades for Ministers, we will still want from time to time to induct successful and able men from the private sector into the Cabinet, men who are earning far more than the revised pay for Ministers, to serve for one or perhaps two terms. If such a person has first to be tried out for a period as a Minister of State before being appointed a full Minister, the problem becomes more acute. To accommodate these possibilities without upsetting the protocol order, the Government is introducing a system of make-up pay, similar to that practised with reservist national servicemen. In future when a Minister or a Minister of State is appointed, he may receive make-up pay in addition to his rank pay. In other words, if he earns more than that of a Minister of State and he is appointed as a Minister of State, the difference will be paid to him by way of a make-up pay, but he will not receive the entire difference. He will receive only up to 90% of that difference. The calculation will be based on his income tax returns for the last two years before his appointment. The make-up pay will not be carried on for ever. A Minister can continue to receive this for up to two terms of office. In other words, after two terms the make-up pay will be removed because after that he either returns to the private sector or continues on his rank pay alone without this make-up pay. We are introducing this system of make-up pay because I believe this will enable the country to benefit from the services of those who do not wish to make politics their entire career, but who have a contribution to make to the nation. They can now become Ministers without having to make too much of a sacrifice. The system of make-up pay will not apply to existing office-holders. It will be used primarily to induct successful people between 35 and 45 years of age to be tried out as Ministers of State before they are appointed as Ministers. MPs' Allowances Members of Parliament currently receive a tax-free basic allowance of $3,000 a month (gross $3,850). This will be increased to $4,000 a month (gross $5,184). In addition to the MPs' allowance, MPs will be allowed to reclaim reimbursement of up to $750 a month, to defray the wages of a legislative assistant and a secretary. Several MPs can club together to engage a young graduate (e.g. one who is doing his Masters or Ph.D) as a legislative assistant, plus a secretary. The legislative assistant can help the MPs to research issues and look up facts, so that MPs can be better prepared for public speeches and Parliamentary debates. The secretary is to help the MPs to despatch constituency work. Such help may make it easier to get good men to run for Parliament. Most mature legislatures provide such support to their members. For example, British Members of Parliament and US Congressmen have legislative assistants. They are often bright new graduates, either doing a post-graduate degree, or seeking two to three years of broad exposure before moving on to bigger jobs. We will draw up the rules later. The rules will apply equally to both opposition and government MPs. Non-constituency MPs will be eligible to claim reimbursement for 2/3rds of the full allowance for a legislative assistant but not the 1/3rd for secretarial assistance, since they have no constituents to look after. Judicial and Other Statutory Appointments Now, I shall deal with the salaries of the judicial and other statutory appointments. Judicial appointments include the Chief Justice and Supreme Court Judges. Other statutory appointments include the President, the Speaker, Attorney-General and Chairman of the Public Service Commission. Annex B, which I have distributed earlier, gives the details of their salary revision. The components parallel those for Superscale Officers in the Administrative Service, namely: (a) Higher salary grades for each appointment; (b) a 1ª months non-pensionable Variable Bonus contingent on economic performance, and (c) a fixed bonus in lieu of the performance bonus payable to the political office-holders and the Superscale Administrative Officers. The Chief Justice will have his basic salary increased from $18,800 per month to $28,950 per month, and Supreme Court Judges from $13,600 per month to $19,550 per month. The Government will amend the Judges' Remuneration Act to effect these changes to Judges' salaries. Judges are recruited from the Bar as well as the Legal Service. The salary gaps between them and private sector lawyers are especially large. At present, the Chief Justice earns less than 56 other lawyers in the private sector, and Judges less than 86 other lawyers in the private sector. The gap is so wide that few lawyers fit to sit on the Bench are willing to serve as Judges or even as Judicial Commissioners. After the revision, in terms of earnings the Chief Justice will rank behind 25 others, and the Judges behind 51 others in the private sector. This is a substantial improvement. The Attorney-General and Chairman PSC will also have their basic salaries increased from $15,900 per month to $21,100 per month. The Speaker will also have his salary increased. The Leader of the House will move a motion on this later. All these appointees will receive the same additional half month of Variable Bonus, like other civil servants. This is, of course, subject to the performance of the economy. It is not feasible for these statutory appointments to be paid a Performance Bonus. Supreme Court Judges receive fixed salaries, in order that they cannot be pressured by the Executive, or even by their peers, into rendering harsher judgments. It would be invidious to pay them performance bonuses. On the other hand, to leave them out from the scheme altogether would deprive them of a significant benefit. The Government has therefore decided to pay the statutory appointments a fixed bonus in lieu of the Performance Bonus. The President, Chief Justice, Speaker, Attorney-General and Chairman PSC, will receive two months of this fixed bonus. The Judges will receive one month of the fixed bonus. Cost The total additional cost of this salary revision is $9 million per year, made up of $4.3 million for the President, Ministers, Parliamentary Secretaries, Political Secretaries, and Speaker; $3 million for the MPs, and another $1.7 million for the Judges and other statutory appointments. Implementation The revised salaries will come into effect on 1st April 1989, together with the revised Civil Service salaries. Conclusion This revision will narrow the gap between Ministers' salaries and private sector incomes of senior executives, managers and professionals, and between Judges and lawyers in the private practice. It will not eliminate it. The gap still remains significant. Some people will try to make political capital out of this revision of political salaries. We must expect it. They will say that those who go for public office should be ready to make sacrifices. This is hypocrisy. People talk of others becoming political leaders and needing to make sacrifices. But will they sacrifice their own comfortable careers for a political life? Will they ask their favourite son or daughter to go into politics? Not just for one or two years but for 10 and more years. Have the Opposition found such noble self-sacrificing people to join them and offer a credible alternative leadership to the PAP? Singapore's future requires us to be hard-headed. In spite of better terms for the MPs and Ministers, I do not expect a rich harvest. Our talent pool is small, and no salary revision can enlarge it. But proper salaries can help us to gather whatever talent we need from whatever talent we have. I know this salary revision is politically sensitive and I think MPs should also know this. It should have been done much earlier, but the Government postponed it because of the economic recession. This time, before proceeding, I discussed this with my colleagues. They agreed that we should act, although they knew that we would have to work hard to win public support for this measure. The Prime Minister was especially supportive and encouraging. In fact, he offered to speak in support of my statement in this House. I thanked him, but I told him that since this is a the decision of my colleagues and I, we have got to carry out the decision both in this House as well as outside this House. Ministers' salaries are a political issue in every country. I do not think I need to tell the MPs this. They know this very well. If you look around at other countries, because it is a political issue, some countries pay Ministers derisory salaries, but give them less conspicuous benefits, some proper, other ingenious, to make up. Other countries have a revolving door arrangement. They allow their Ministers and high officials, after leaving office, to make up, as lobbyists or lawyers, through consultation fees and book royalties what they were not allowed to earn in office. Yet others keep up the pretence that being a Minister is such an honour that salaries are hardly necessary, with the result that able people shun public office, and the country declines. My colleagues and I have decided to tackle this issue directly and openly. We could have avoided this issue by camouflaging Ministers' salaries, through ingenious allowances invisible to the public, like furnished housing, servants and gardener allowances, cars with drivers, and paid annual holidays abroad for the family-or by making the salaries tax-free. But that would not be in keeping with our practice of honest and open government. To continue to have a good and clean government we believe our best policy is to pay a person what he is worth, be he a civil servant, a political appointee, or a private sector employee. In the case of Ministers, we are actually paying them less than what they are worth, so that no one can accuse a Minister of profiting from taking office. That is why we decided on 90% instead of 100% make-up pay for future office-holders. The cost of the salary increases is negligible, compared with the big decisions Ministers have to take. The price of failure to induct the top 0.001% (that is one in 100,000) of Singaporeans to serve the country is incalculable. Just look at what happened to the Philippines under President Marcos. It will be many years before Filipino people stop having to leave home to work in foreign countries and send money home. If we fail to uphold the high standards of government because we have failed to induct the best and the ablest into the political leadership, Singapore's future can be very bleak. Unlike the Philippines, we do not have the land, the rivers and the mountains to grow rice, mangoes, bananas, pineapples and other fruits for export, or dig for gold, bauxite and other precious metals. Our best bet is to induct the best, the honest and the able to keep up a clean and effective government, the best that Singapore can field. We are committed to fielding the best national team for the Government of Singapore. You have to support us in this task.