Mr Speaker, Sir, I think it was a stroke of good luck that in 1959 Mr Lee and the PAP won the elections. Had Mr Lee and his colleagues not been in charge of Singapore, I do not believe we will be discussing the White Paper today. It would have been a very different Singapore. The best men and women of that era came forward to stand for elections to lead Singapore. They had a mission: to fight for independence, to battle with the communists, the communalists and then to build Singapore from scratch when Singapore separated from Malaysia. Can we recreate those circumstances and produce similar men and women who would respond to this noble calling of politics? I start on the assumption that that period is over. I hope it does not come again, because if it comes again, it means we would require a very different set of people to volunteer, to fight, to deal with crisis, with big problems, to sacrifice pay, forget all about the benchmark and so on. I hope we do not have to repeat that period. So I start on the assumption that Singapore is going to be successful. That is my job. That is the job of my colleagues. If we succeed in keeping Singapore going, then how do we get people to come in under very different circumstances? I never joined the PAP before I became a Member of Parliament. I knew very little about the PAP. I attended election rallies. I listened to Lee Kuan Yew speaking at election rallies at Pasir Panjang. I followed what he spoke in the newspapers and listened to the radio. But beyond that, there was no special interest in joining the PAP. I was not in the CCC. I was not active in helping the PAP through their grassroots organisations. I was concentrating on my career when I was a young man in the public service, and later on in Neptune Orient Lines. So I was surprised, when in 1976, the late Hon Sui Sen called me up to his office, and asked me whether I would consider standing for election. My response at that time was: give me three days to think over. At the end of the third day, I dropped him a note. I said, "Yes, I will come in." My decision was based on a very simple personal factor. I went through the upper secondary school and the university on a bursary. Without a bursary, I would not have been able to go to university. So there was no question whatsoever. I just felt that I should say yes, and serve. Of course, he explained to me why they were looking for people like me, and not from within the party. When the Senior Minister, at that time Prime Minister, was looking for a successor, I was one of those considered by my colleagues. But when I was selected by my colleagues, there were a couple of us who met in Tony Tan's house and they decided on me to be their leader, I did not jump for joy. I accepted the responsibility. That was in 1984. Even then, I was still not sure whether I was the best person to be Prime Minister. It took me some two years, and it was only in 1986 that I decided to say yes. Nobody else wanted to do it or could do it from my cohort of colleagues, and I felt that I should therefore concentrate on doing the job. At the 1988 general election, I was expected to take over the Prime Ministership from Lee Kuan Yew. Some of my colleagues were a little disappointed that I did not take over right away. They thought a change was good, but I did not. I did not feel fully confident enough to take over. So I took my time. It was only in 1990 that I felt that I could do this job competently. Then Mr Lee and I agreed that he should step down by a certain date, and I decided to take over in November 1990. When I joined politics, did I think of money? I did not know what an MP's allowance was, what a Minister of State's pay would be or whether I would be appointed Minister of State or Senior Minister of State. It was entirely up to Lee Kuan Yew or the Government or the Cabinet. But I knew what I had to give up. I gave up a chauffeur-driven company car, a Mercedes. I gave up a company house, a two-storey detached house on 10,000 square feet of land. I had never negotiated over pay. In the civil service that is not possible, or when I was working in the private sector, and I am not going to negotiate over my own pay now. This is the most difficult part in this exercise where I am here to move the motion on the White Paper to pay the civil servants and Ministers better so that they can keep Singapore going with good people. The delicate part is the Prime Minister's pay gets rolled into one with this. So it would come across that I am also pushing for the pay of the Prime Minister, that is, for myself. I intend to take out the Prime Minister's pay or the benchmark in the White Paper and ask an independent panel to review it separately. Then I can argue with moral authority what the Ministers and civil servants should be paid. It does not matter what the panel would decide. 10% less, 20% less, 30% less, it does not matter. What I want is the moral authority to be able to make a case for the civil service and for future Ministers. The White Paper was worked on mainly by the Deputy Prime Minister. Of course, he was assisted by a team of civil servants. I have tasked him with revamping the personnel administration in the civil service. As you know, the personnel management in the civil service was not the best in the country. You have the Public Service Commission, a central body, which recruits, assesses, promotes officers, not just senior officers, but all officers in the civil service, the whole range of them. It was too centralised. The Ministries and departments which want to have the officers did not have the authority to recruit, nor the authority to promote, nor the authority to censure. That system worked for many years but it was clear to many of us that that system was not working and would not work in the future. So I asked the Deputy Prime Minister to look into how we can change the whole system which would involve changes also to the Constitution. The changes have been announced in this House, and the Personnel Boards are in place. The discussion on the White Paper must, therefore, be seen in this light against its wider purpose of changing the whole system. I know that the system must be changed, not just from my experience as an employee in a private sector company, but as a young man in the civil service. As a young man, after working for about a year in the civil service, I applied for a job in the private sector. Money does not mean much to me now. My children have grown up. My wife has her own independent means of income. My needs are much less now. But as a young man, I can tell you that money was important. I started work as an Administrative Officer, $830 per month. I was planning to get married. I looked up the advertisements, I saw an advertisement by Shell company which offered the starting pay of $1,100, and that was a big increase for a young man about to get married. So I applied for the job. I was surprised at the system of interview. For the public sector service, I was called up before the Public Service Commission, just one short interview, lasting 15 minutes and the job was mine, partly because I think I was on bond. But in Shell, I was first interviewed by the Personnel Manager. After a few days, I was called up, interviewed by somebody else again. I had to sit for an IQ test, written comprehension test, and had to write an essay on a subject given to me on the spot within a certain time limit. Then I was interviewed by the prospective departmental managers who had an interest in recruiting new staff - Finance and the Supply Departments - and thereafter invited to a lunch, given by the Chairman, where there were a few other senior managers to chat you up, to assess your social etiquette, your personal behaviour. At that time, I knew nothing of HAIR qualities, helicopter qualities, sense of imagination, sense of reality, and so on. But that was how Shell, in retrospect, was assessing its candidates. Now that we are in charge of the civil service, when DPM looked into the problem and told me that the system must be changed, I agreed readily. The system of Personnel Boards is now in place, but will that alone do the trick? Can we recruit the people whom we want into the civil service, just by changing the personnel management system? I think it will go a long way, but it will not be sufficient. At the end of the day, salary is still the key factor. I agree with Kanwaljit Soin that there are other factors involved, and we should look into these factors. We should attract people to join the service and, very importantly, to retain them. But at the end of day, my own belief is salaries play a big part for a young man and a young woman, just as it was for me when I was about to get married. So the Senior Minister, when he was Prime Minister, started the process. He pegged the salaries of the Administrative Officers to the private sector's equivalent, 80% of the private sector pay. But as he explained, in practice, the process was about three to four years behind time. So, in effect, the percentage was much lower than the 80% which he wanted. When DPM looked at the problem he recommended that we aim higher, peg the salaries to the top few hundred salary earners in the private sector. It is not just a question of upping salaries. It is an entirely new way of looking at things. It is a total philosophical change. We start on the basis of this question: what kind of people for Ministers and Administrative Service? What kind of people do you want to be in Government, to be running your Administrative Service, and to be in Cabinet? Do we decide on the salaries first without worrying about private sector pay and then hope to attract the best people to join the Administrative Service, which was the previous system? Or do we decide on the kind of people we must have for the Administrative Service or Cabinet and then find out what salaries these people would be capable of earning at a certain point of their career, and then use equivalent salaries to get them to come in? And that is the approach which we have opted for. It is a new way of looking at things - decide first on the kind of people you must have in Government and in the Administrative Service, and then design the salary structure to get these people to come in. Not the other way round, have a salary structure, hoping people will join us. For the Administrative Service, we want people who can be amongst the top 15 salary earners in the cohort at age 32. People who will do well in the private sector, who will do well in the public sector, whom we think by the age of 32, they will be so successful that they will be earning a certain income. So those are the people whom we want, the top 15 salary earners for that age cohort of 32. For Ministers, we want people who have the ability to rank amongst the top 100 salary earners in Singapore regardless of age. So we are aiming for a very special group of people to come in. We are not saying that this is the salary, please come in. That can be a wrong way of getting people to come in. We say, who are the people out there who either earn that much, or can earn that much in time to come. And they are the people who must have certain qualities in them and the first quality must be competence, ability to make the company succeed or to be successful in the profession. And this is the point which Shanmugam grasped very clearly and it requires almost the last speaker to see this point. This is the central issue of the White Paper - the philosophical change. Also, more importantly, as Shanmugam noted, we want to let our young students know at a very young age what are their career options. At the moment, for many young people, the Administrative Service is not a career option. And again, I speak from personal experience. When I graduated, despite the bond which I was on, I wanted a transfer to the university, to be a lecturer, to do my PhD. I never knew that an Administrative Service existed. So when I was called up by the PSC and offered this job, I asked, "What's that? Administrative Officer?" I had no idea. Lecturer, I know what it was all about. Doctor, I know; lawyer, I know. But Administrative Officer, I had no idea. In a young man's mind, the Administrative Service was blotted out. What we want to do now is to change the whole perception of the Administrative Service. We know how much doctors will earn, how much lawyers will earn. We are telling these young people that before they decide on their courses in the university, whether it is law, medicine, architecture or engineering, there is also a career which pays very well in the Government service which he ought to consider. And you could see the effect of publishing data. When the Senior Minister, some years ago, published the data on what lawyers earned, there was a palpable shift towards the Law Faculty. I think today, Prof. Walter Woon and the Law Faculty would have no trouble in recruiting bright young people to the Law Faculty. But that was not so years ago. So if parents and students know the earnings of various professions, including the civil service and the Administrative Service, they can then make informed choices at a young age before it is too late. Because once you have done law, you have done engineering, you have done medicine, architecture, it is very unlikely that bright minds, having gone through those courses, will consider joining the Government as an Administrative Officer. We have lost them. So we are going back to the 'A' levels, maybe even way before the 'A' levels, to give these young people an option, and we need some people to do the right courses to join the civil service to help us to run this place. Ministers up to now come mainly from the same pool of people - Administrative Service, SAF. Even if they do not come from within these two services but from the private sector, they would also come from within the same talent pool of people we are looking for. There is a complication in deciding on what we should pay the Ministers. I can tell you that the Ministers here would not mind taking a pay cut. But if we peg the Ministers' salaries lower because of this sense of public duty which we have, we would then suppress the salaries of the Administrative Officers, the Judges, the engineers, and the other senior officers. Or do you say, "Doesn't matter. Let the Administrative Officers be paid much better than a Minister." They can do that for a few outstanding Administrative Officers, as indeed we have now. Several Administrative Officers are paid more than our Ministers. But if we suppress the Ministers' wages, that must mean suppressing generally the salaries of the civil service and the Judiciary. If we do not do that and we allow the civil service to pay them a market wage and we identify a top civil servant whom we want to be a Minister, can we persuade that civil servant to give up one-third of his pay to be a Minister? If you can do it, will you please do it for me? I do not think in a real world, that is possible. 5% or 10%, they will sacrifice. 20% or 30%, to give up a job as Permanent Secretary, Staff Grade I, to be a Minister and paid a Superscale B, I do not think that is on. So when we adjust the salaries for the public service, in particular, the salaries for the Administrative Service, we also look at the same time at the salaries of Ministers. The two are linked together. I agreed with the recommendation of DPM on the benchmark of civil servants. He saw me at the various stages of the White Paper. For the bright young civil servants, aged 32, pegging that salary to the 15th person salary earners in the whole of Singapore, no problem, I agreed. But I decided on the benchmark for Ministers. DPM gave me several points to choose from. We can peg it at 50% of the top four from these six professions, 60% or two-thirds. I decided on two-thirds. To repeat, 50%, 60% or two-thirds. I decided on two-thirds because I want to aim at a particular group of talent at the top. It is a matter of judgment. I think in this case, there is no science to tell me that two-thirds is the right figure, but I feel that that would be about the right level. If it proves too high and in two years' time we get a flood of applicants, good ones, to be Ministers, I can lower the salary. But if it proves too low, of course, we look at other factors too, well, we may have to come back and revise salaries further. I take the point that salaries are not the only factor in our difficulty in getting Ministers. We have to look at other factors. What I ask for today is to give the formula a try. We will try it for five years and then we review the formula. The suggestions made by MPs can be taken into account when we review the formula. I intend to set up a committee to verify the figures and calculations of the Inland Revenue Authority. Some people have expressed surprise that the figures are so high. I think it is useful to have an independent panel to look at the calculations to verify the figures, and then to have the figures published every year as they appear in the White Paper. I propose that the chairman of the panel be somebody from the Public Service Commission and then we should have the Auditor-General on the panel plus two or three others from the private sector. I will look for suitable people from the private sector to be on the panel. This suggestion is similar to what Mrs Yu-Foo Yee Shoon and Encik Othman Haron Eusofe have suggested, that there should be a separate panel to look at all this. But the panel should not be deciding on the salaries of civil servants and Ministers, as somebody suggested. I think that will be wrong. However difficult the political problem may be, we, as the Executive, in the end must make the decision. In companies, they do not get an outsider to decide on how much directors or the CEO should be paid. Somebody from within the company must decide. They may do surveys. They may hire a consultant to advise them. But in the end, the decision must be taken from within the company. Likewise, I would not be in favour of setting up a commission to decide on the pay of civil servants and Ministers. It may be delicate, but we have to decide and we will come to Parliament from time to time to justify whatever changes to the formula there may be, or whatever pay the Ministers should be getting. The confidentiality of income tax returns will be maintained when we have this panel to examine the documents. The names will be blanked out. The committee will be sworn to secrecy and the individual taxpayer's name will not be revealed. It will be done in a manner that nobody knows who is earning what. The figures can be examined without the names. The benchmarks are not for all time. The panel will give us its comments and we will take into account MPs' comments and later on, revise the formula, when we have more experience in working the system. I shall also ask this committee to review the benchmark for the Prime Minister. On the question of benchmarking, intellectually and in principle, I do not think anyone can fault the proposal to benchmark pay to private sector earnings. I have listened to the arguments but I do not think you can fault it intellectually or in principle. What you can disagree on is how to peg, where to peg. Is it the top four, is it the top 10, is it the fifth percentile, is it the tenth percentile? The details can be argued over. But when you are deciding on pay, it must be done objectively. You have got to decide in relation to something. In relation to the public sector itself, it makes no sense. It must be related to something outside and that is the private sector. Benchmarking is linked to actual pay in the private sector, of comparable job size, responsibility, requiring people of similar aptitude and talent. Yes, in benchmarking, we should take into account the different characters of the public sector and the private sector - the risk/reward ratio, the security in the civil service which is more than that in the private sector and the nature of the job itself. But ultimately, you still got to have the right pegging, because civil servants can still vote with their feet. Dr Lee Tsao Yuan and a few others have commented on the formula that there is this upward bias in the formula. Yes, the criticism is valid. There is this upward bias in the formula when you choose the top four of the six professions. Because year after year, you are choosing the top four. Individuals might have peaked and they might have gone down in their earnings. But year after year, you are choosing the best of the whole lot. But there are other biases in the benchmark which weigh the figures down. For example, if you take one profession like lawyers, there are many lawyers earning over $1 million, even young ones. In 1993, over 26 lawyers earned more than $1 million. Three of them were in the age group of 36-40. I do not know whether these three lawyers were working in their father's firm and therefore given huge pay, because we never looked at their names. So we would not know who is earning what. But you are taking only the top two, and there are more lawyers earning over a million dollars than, say, CEOs of MNCs, so there is this downward bias. Also, I would make the argument that the Ministers should be on top of the job. While others will peak and go off, if the same Minister is on the job, he should be amongst the top four all the time. If his performance goes down, his energy level goes down, then, as one MP pointed out, that is the time for us to consider easing him out in as gentle a manner as we can. So it is still right to argue that whilst there is the upward bias, Ministers are expected to be amongst the top, year after year. There is also the criticism that the benchmark is not stable because of year to year variations as a result of bonuses, share options. Again, the criticism is valid. It is not as stable as you want it to be. But the committee that did the benchmarking had calculated the benchmarks over the last five years. They looked back at figures of the last five years and they looked all right. But I concede that this may not be so in the future. Again, we will fine-tune and incorporate suggestions and if there is a defect in the formula because of this instability, we will review it. Even as we revise the salaries in accordance with the formula, we will be exercising discretion. If they are spiked upwards, we will be quite careful. We are not going to link the salaries of the civil servants and the Ministers just because of a spike. We will moderate. What about other ways of deciding on Ministers' pay? I think Mr Chiam has suggested that we go on a decent lifestyle basis. I think he was supported, maybe innocently, by Assoc. Prof. Walter Woon. But a decent lifestyle basis is subjective. What is a decent lifestyle? Do you provide for children's education in universities abroad? How much do you have to put aside for old age? And why should the Minister have such a decent lifestyle when the bulk of the population live in 4-5 room flats and some in 2-3 room flats? Why can the people not have the same lifestyle as the Ministers? So this subjective element will be difficult to use in deciding on how much a Minister should be paid. And I know of no company in Singapore - perhaps there are such state companies in Communist countries - which pays its employees on a decent lifestyle basis. In Communist countries where they pay employees in accordance with need, maybe they pay in accordance with decent lifestyle. But that decent lifestyle is at a very low level. For market economies, it is payment in accordance with the worth of a person, how much does he contribute, what is his ability, what is his performance. But even on a subjective basis, Mr Chiam's calculation is not far off the current pay of the Ministers. For the Minister, Mr Chiam thinks the Minister deserves $51,000 a month for a decent lifestyle. For the Prime Minister, $63,750. Let us round it off to $64,000. I was not sure whether this monthly pay should be multiplied by 12 or whether we should add in the 13th month payment, variable bonuses and so on.