Hansard, 2007-04-11

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: Name From (2007) To (2007) Mrs Josephine Teo 12 Apr 13 Apr Mr Matthias Yao Chih 16 Apr 18 Apr 19 Apr 22 Apr

ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Mr Hri Kumar Nair asked the Deputy Prime Minister and Minister for Law what was the reason for the acquisition of the land at 20-22 Geylang Road on 26th February 1983 and why was the land left undeveloped for over 20 years after the acquisition.

2. Mr Siew Kum Hong asked the Deputy Prime Minister and Minister for Law since the Land Acquisition Act was introduced (a) how many cases were there where the Government compulsorily acquired land that was subsequently not used for five years or more; (b) what were the most common reasons for acquiring land in such cases; and (c) what controls are in place to ensure that the Government only acquires land that it actually needs.

): Mr Speaker, may I have your permission to take the first two Questions together as they are related?

Yes.

May I answer Mr Hri Kumar's question first? Sir, the land in question belonged to Teng Fuh Holdings Pte Ltd and was the subject of litigation in the courts recently.

The land was in the immediate vicinity of the Kallang MRT station. When it was acquired in 1983 for the purpose of comprehensive redevelopment, the plans for the area included a commercial-cum-transportation centre.

Subsequently, the clean-up of the Kallang/Rochor River was successfully completed and the land use plans for the entire Kallang Basin waterfront were extensively reviewed. Accordingly, the subject land was rezoned as part residential, part open space and part beach in the Master Plan 1998, to optimise the development and recreational potential of the area. In line with this, the Government also carried out other public enhancement works, such as the development of the Kallang Riverside Park, and the phasing out of the Kallang Gasworks. All these took many years.

The vision for Kallang Basin, including the Teng Fuh site, continues to be one

where there will be good quality housing and other waterfront developments.

Let me reiterate, Sir, that Singapore is land scarce. In our special context, optimising the use of our land is a definite necessity. Sometimes, due to new factors which arise after the acquisition, it is no longer optimal to put the land to the original planned use. This is a fact of life due to changes in demographics and land use needs which evolve over time. It would be very detrimental to Singapore to ignore such changes that affect land use planning.

Sir, where land is acquired for comprehensive redevelopment, it is also often not possible to synchronise precisely the acquisition of land with the redevelopment of the land. Especially for a large area or precinct, a longer gestation period sometimes is almost unavoidable. This is usually because the developing agencies need to carry out site works and divert infrastructure, sometimes in several phases, to minimise disruption to the public and to prepare the land for redevelopment.

So, on occasions, all these factors can contribute to a delay in the redevelopment of certain acquired sites. As for the case of the land formerly belonging to Teng Fuh Holdings, as I have said, the changes in the development plans and the time taken to carry out public enhancement works for the entire Kallang Basin area had contributed to the delay in redeveloping the land.

Let me turn to the question by Mr Siew Kum Hong. Sir, the Land Acquisition Act was enacted in 1966. From available records, more than 15,000 land parcels have been acquired. In view of these acquisitions stretching over a long period of 40 years, I hope the Member will understand that it is extremely difficult and not practical for me to give a precise answer to his question. We would have to

mount a massive search to go back and examine each and every acquired parcel to verify the development date and see if the time from which the date of acquisition had been more than five years. Moreover, the acquired parcels could have been further subdivided or amalgamated with other lands for redevelopment and the original land parcel might have been expunged. It is therefore very difficult to say now exactly how many cases there were of acquired lands that were subsequently not used for five years or more.

However, I asked the Singapore Land Authority to see what information they could obtain for me. And based on the Singapore Land Authority’s records, we are able to state, Sir, that about 12% of the acquired lands, in terms of land area, have not yet been redeveloped. The rest of the acquired lands, if not already fully redeveloped, are in various stages of redevelopment.

Sir, the Government acquires land for a variety of uses, such as for the development of new towns and industrial estates, for road and MRT construction and for comprehensive redevelopment. As I have explained to Mr Hri Kumar just now, it is often not possible to synchronise precisely the acquisition of land with the development of land. Especially for a large area or precinct earmarked for comprehensive redevelopment, sometimes a longer gestation period is almost unavoidable.

I would like to assure the Member that all proposals for land acquisition are carefully considered. Government agencies that initiate acquisition must provide full justifications on why the acquisition is necessary. They would also have to ensure that prior approval is obtained for the intended use before requests for acquisition can be considered. For major acquisitions, the proposals will also have

to be presented to a Ministerial Committee comprising the Minister for Law, Minister for National Development and which sometimes can include other Ministers like the Minister for Transport if it concerns land acquisition related to MRT or major expressway development. Finally, every proposal for land acquisition must be submitted to Cabinet for approval.

3. Mdm Cynthia Phua asked the Deputy Prime Minister and Minister for Home Affairs whether there is a centralised system in place to warn the public to evacuate from buildings because of severe earth tremors and which central agency is responsible for raising the alarm if there is a need to take precautionary measures to evacuate from buildings or the underground train system.

4. Dr Teo Ho Pin asked the Deputy Prime Minister and Minister for Home Affairs (a) what measures are taken to educate Singaporeans on proper evacuation from high-rise buildings during emergencies such as earthquakes or fires; and (b) whether the Ministry will consider conducting emergency evacuation audits to test the effectiveness of measures undertaken by building owners.

Sir, may I take Question Nos. 3 and 4 together as they are related?

Yes.

Sir, tremors in Singapore caused by strong distant earthquakes are handled by a multi-agency team, comprising representatives from the Meteorological Services of

NEA, BCA, HDB, LTA, the Police and Civil Defence. These agencies provide the relevant expertise to handle tremor incidents.

Sir, Singapore is located at a significant distance away (more than 400 kilometres) from the nearest Indonesian earthquake fault. Over such distances, the seismic waves reaching Singapore would have reduced to a level that is unlikely to have an impact on the structural safety of our buildings which are designed according to established building codes and can withstand tremors caused by distant earthquakes.

Sir, according to LTA, MRT viaducts are designed to withstand loads associated with environmental effects, including tremors caused by distant earthquakes. Tunnels are much less vulnerable to these tremors than above-ground structures. Hence, the MRT structures and underground system should be able to resist the tremors. There is therefore no cause for the public to be alarmed when tremors are felt.

Sir, a disaster management protocol, spearheaded by the Police has been put in place to manage incidents of tremors caused by strong distant earthquakes. In a tremor incident, the Police will mobilise BCA and HDB engineers, who are on call round the clock to inspect and assess the structural integrity of affected private buildings and HDB buildings respectively. These engineers will look out for signs of structural distress, such as cracks in the beams and columns.

If an evacuation is necessary, Police officers will be on-scene to facilitate the evacuation and maintain law and order. The public is advised to remain calm and get out of the building in an orderly manner. Police will also coordinate the

dissemination of alerts and advisories to the public.

Sir, in the case of MRT structures, the rail operators will carry out the inspection together with LTA. The rail operators have put in place procedure to deal with tremors affecting the MRT system, including evacuation of passengers from the trains or stations where necessary.

Sir, although we have a response plan, members of the public are advised to familiarise themselves with emergency procedures to deal with tremors. These, and other emergency procedures to deal with various contingencies, are set out in SCDF's Emergency Handbook, available at Civil Defence (CD) Division Headquarters, Fire Stations and Neighbourhood Police Centres, as well as on SCDF's website.

Sir, on training, since September 2003, SCDF has conducted programmes to train Singaporeans in emergency preparedness skills. These include a Community Emergency Preparedness Programme (CEPP) conducted free-of-charge daily at the four CD Division Headquarters as well as schools, commercial and industrial workplaces. To date, Sir, about 240,000 participants had been trained.

SCDF also conducts Emergency Preparedness Day, or EP Day, at constituency level to give hands-on experience to residents. To make the exercises more realistic in view of the current security climate, residents are taught how to deal with terrorism-based scenarios by familarising themselves with emergency procedures. For instance, for a bomb or fire scenario, residents will evacuate from their homes to a pre-identified area. Since 2003, 48 EP Days have been conducted annually. In 2006, the EP Day was extended to commercial and industrial premises, bringing the number of EP Days conducted annually to 72.

Sir, as to whether MHA will conduct emergency evacuation audits to test the effectiveness of measures undertaken by building owners, this is already being done. Currently, Fire Safety Managers appointed by building owners are required to develop emergency plans as well as conduct at least two evacuation drills and two table-top exercises annually. These drills and exercises test the adequacy of the emergency plans for the respective buildings under their charge and are documented in the Annual Fire Safety Report submitted to SCDF. To ensure effectiveness of the emergency plans, SCDF conducts regular audits on these evacuation exercises and drills as well. To complement the work of the Fire Safety Managers, SCDF also conducts exercises at selected high-risk commercial and industrial premises.

): Sir, in the case of fire evacuation of any building, it is specific to that building because a fire incident is specific to a building. But in a tremor, it is on a large scale. A lot of occupiers in the offices in Shenton Way did not know what to do. Some evacuated and some did not. My question is: who is coordinating this, unless what MOS is saying is that he confirms that no evacuation is needed when you feel the tremor?

Next, the communication channel for the occupiers is not there. Many people are not receiving the information as to what has happened.

Sir, as I have said, our buildings are safe from tremors which come from so far away. In fact, the drill is set out in the SCDF's Emergency Handbook, which is, unless new cracks appear in the building, on the walls, parapets, columns and so forth, it is just tremors per se. If you are inside the building, stay inside, get under cover, for example, under a table, and keep away from things that may fall on you,

such as glass. If you are outside the building, keep in the open, away from buildings and any electrical poles. But I know that residents may still come down.

On 6th March, there were two tremors. One was in the late morning and one in the early afternoon. Quite naturally, some residents came down, although, like I have said, the assurance is, unless there are cracks appearing arising from the tremor, just stay where you are. So far, we have an average of one to two tremors a year. No building has been declared unsafe.

When this happens, Operations Tremor is activated and police then takes charge. Police then activates the engineers from BCA and HDB to inspect the buildings. In that incident, about 350 buildings were inspected.

In terms of communication, Operations Tremor will provide a plan with the communication coming from a centre, which is the police. Police will work with MediaCorp, TV channels and radio to issue advisories. They will go out advising the residents what to do. But internally, in the building, it is up to the building management as to what sort of communication plans should be put in place.

I just wanted to say that the communication channel is important because, in this case itself, the tremor was quite widespread and the information coming from MediaCorp was a bit late in that manner. So is there any way that the building owners will be able to receive some of these messages that can be passed on to the occupiers of the buildings?

Basically, like I have said, the drill is known to everybody. So once the tremor is felt, police contacts HDB and BCA to

check all the buildings which are affected. It takes time for the calls to come in. Police will collate the information on which are the buildings being affected. I think Ms Indranee Rajah,

who was in Ocean Towers, did not go down because the advisory was that buildings were safe from tremors. So, if residents take this cue, and stay where they are, get under cover and, as I have said, keep away from falling things, the tremor will pass.

5. Mdm Ho Geok Choo asked the Deputy Prime Minister and Coordinating Minister for National Security whether he will provide an update on the Risk Assessment and Horizon Scanning system that was set up recently.

Sir, the Risk Assessment and Horizon Scanning (RAHS) system is meant to help analysts, for example, those involved in strategic planning, to discern weak signals of potential major events on the horizon that can have an impact on Singapore. This will enable policy choices to be made, and pre-emptive and preventive steps to be taken where necessary. The system, however, is still in the development stage which we hope to have operational by the end of this year.

Developing such a capability is important in today’s complex, inter-connected and uncertain world. Asymmetric threats, like global terrorism and disease pandemics, are challenges for countries around the world, Singapore included. For such complex and non-traditional threats, models and approaches

that are not purely based on recent history or past observations are needed to help analysts discern emerging patterns of potential and novel threats. It is with that aim that we initiated this Risk Assessment and Horizon Scanning framework.

In practice, the RAHS system is a suite of software tools revolving around several key processes: building models; collecting data and organising information; detecting emerging trends and discovering anomalous patterns by matching data against models; as well as collaborating with other analysts across the world.

RAHS, let me stress, however, is not about predicting the future or specific events. Furthermore, while it is a highly sophisticated tool, it can never replace the well-trained and experienced analyst. It is meant to augment the analyst by helping automate some of the more tedious aspects of research work, so that the analyst can focus on the more important analytical tasks.

At present, the RAHS system is a research and development programme, and we expect to evolve the system further in the years ahead. To succeed, RAHS would need to work off a collaborative approach linking Ministries and agencies across Government. The system will be useful not just in the traditional security domain, but also to monitor emerging social and economic trends.

To improve on the RAHS tools and concepts, and to try out new applications, an Experimentation Centre will be set up in the second half of the year. Institutions, like the Swedish Defence Research Agency and the United States Joint Forces Command (US JFCOM), will be collaborating with the Experimentation Centre, and we intend to involve our own Ministries in Singapore and agencies in some projects.

Sir, some time ago, the Deputy Prime Minister mentioned putting in place a whole-of-Government framework to think about a complex and uncertain future. I would just like to ask how will the RAHS Centre actually work with the various Government agencies and the public at large, especially the community, to embrace this whole-of-Government approach to horizon scanning.

My second question is that while this may be in place in Singapore, how do we actually work with our neighbouring countries? Considering the fact that we are so small, anything that happens nearby could actually affect us as well.

Sir, the Member mentioned the whole-of-Government approach, which is important for major crises that we want to anticipate, whether it is in the area of terrorism or other crisis, such as disease pandemic.

The RAHS is a tool and it is not the entirety of the system. It is a tool which involves specialists working with the various concepts that I mentioned. It is one of the tools which we are going to develop in collaboration with other Ministries and, in fact, the two agencies that I mentioned.

The whole-of-Government approach involves more than this tool. It involves a collaborative approach where agencies do not view their role as purely compartmentalised. We must have a perspective that requires sharing of intelligence and information, and pooling of the resources.

Take terrorism, for example. 911 has shown to all countries that we cannot have what is referred to as a "stove pipe" approach, where each organisation deals as if it was a silo. It is impossible. Those who have followed hurricane Katrina also know that that demonstrated and

underlined the importance of agencies working closely. If that were so for larger countries, what more for smaller countries.

I am glad that the Member has reminded us of the whole-of-Government approach. RAHS is a tool that will aid the whole-of-Government approach.

With respect to collaborating with regional countries, yes. To deal with issues like terrorism and pandemics, it goes without saying that we have to obtain the cooperation and intelligence sharing of countries in the region. RAHS, however, is in its early stages of development. And, as we progress, we will consider how we can involve more countries in the region, because it requires considerable infrastructure and investment in such a project in other countries.

Sir, Wired magazine ran a story on the RAHS system, and I think the system was called the largest data-mining exercise in the world. I would like to ask the Deputy Prime Minister whether the RAHS system collects personally identifiable information. And, if so, what safeguards are in place to ensure the privacy of the individuals in question?

Sir, I stand to be corrected but the briefings that I have received on the RAHS system are that it does not collect specific information about individuals. But if it were to do that, then, of course, we will be mindful about the need to protect the privacy of the particular individual.

6. Mr Edwin Khew Teck Fook asked the Minister for the Environment and Water Resources (a) what is the

Ministry's response to the recent 4th Assessment Report of the Intergovernmental Panel on Climate Change on the possibility of global average temperatures and sea levels rising and an increasing number of heat waves as well as severe tropical storms bringing about more floods; and (b) whether the Ministry is taking measures against such possibilities.

Mr Speaker, Sir, t he Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report includes the latest projections of temperature and sea level rise. Being an island in the tropics, Singapore would not be spared from the effects of climate change.

Government agencies have been putting in place various measures that help in adapting to climate change. For instance, the PUB has long required new reclamation and construction projects to be built to a level 125 cm above the highest recorded tide level. This would be sufficient to address a possible sea level rise of 59 cm by the end of the 21st century. This is the upper bound projection in the IPCC 4th Assessment Report.

PUB has also reduced flood-prone areas from 3,200 ha in the 1970s to 124 ha today through the development of drainage infrastructure in Singapore. The completion of the Marina Barrage and other flood alleviation projects would further reduce flood-prone areas to less than 66 ha by 2011. PUB will continue to implement other flood prevention measures to mitigate the risks of floods in Singapore.

With regard to rising temperatures, the PUB’s water supply plans currently

already cater for prolonged dry spells affecting local water catchment levels. With the introduction of NEWater and desalination, we are more resilient should higher temperatures lead to unexpectedly severe dry spells.

We are also making efforts to lower ambient temperature through our greening efforts. Besides providing parks and green spaces, URA and the NParks have been promoting rooftop and vertical greenery in our buildings as well as enhancing streetscape greenery islandwide. HDB is also in the process of introducing rooftop greenery to multi-storey carparks and residential buildings where feasible.

While we have therefore already taken steps to address the challenges posed by the IPCC report, we are nonetheless still embarking on more robust technical studies to assess Singapore’s vulnerability to climate change and the further adaptation measures that we might require.

The projections in the IPCC Fourth Assessment Report are on a global and regional basis. However, the resolution of these projections is still too coarse for Singapore. NEA has therefore commissioned a 2-year study to assess the specific effects and impacts of climate change on Singapore, so as to facilitate the long-term planning of adaptation measures. The study will be conducted by a team of local and foreign experts and will incorporate the scientific findings of the latest IPCC reports.

Sir, an inter-agency taskforce, led by MND, has also been formed to review existing infrastructural adaptation measures. Based on the findings of the vulnerability study commissioned by NEA, the Government will evaluate what additional adaptation measures need to be taken.

7. Mr Edwin Khew Teck Fook asked the Minister for the Environment and Water Resources in light of the implementation of the mandatory Energy Labelling Scheme for airconditioners and refrigerators from 1st July 2007, whether the Ministry will subsequently mandate minimum energy efficiency standards to ensure that only energy-efficient appliances are sold and installed.

Sir, the hon. Member has asked whether there will be minimum energy efficiency standards for household appliances. As I have mentioned during the COS debate in March, mandatory energy labelling for home airconditioners and refrigerators will come into effect from 1st July. This scheme will provide consumers with the necessary information to make an informed choice, knowing both the upfront cost and the running cost of the appliance.

This is an important and necessary first step in creating greater consumer awareness of the need to be energy-efficient. As we all know, Singapore is almost totally reliant on imported natural gas and oil to provide for all our energy needs. We need to be energy-efficient to avoid unnecessary wastage of energy and to remain competitive.

Minimum Energy Performance Standards (MEPS) is a policy tool adopted in some countries to remove inefficient electricity-consuming goods from the marketplace. It is an effective instrument to increase the average efficiency of a product class as the least energy-efficient products are prohibited. However, there may not be a need to implement MEPS if the public responds positively to the implementation of the Minimum Energy Labelling Scheme (MELS). As less energy-efficient products become less

popular, we hope that importers will cease to bring in such products into our market, and this will avoid imposition of further regulations on businesses.

NEA will therefore focus on the implementation of mandatory energy labelling for now. We will study the need for MEPS after a sufficient period of time to assess the market situation.

Sir, I just like to ask the Minister when is the soonest that we can actually adopt mandatory labelling of appliances. Because the longer our households are using them, the longer these items are going to be around. Mandatory labelling, basically, means that we label all our products, even those that are inefficient. Yes, we are providing our consumers with a choice, but the thing is that we are not ensuring that everybody is buying labelled products that meet certain minimum requirements. I think this is a point of concern. If we would like to demonstrate that Singapore as a whole is energy-efficient, it is a small step to go into mandatory usage, at least minimum standards. Once we get to the mandatory labelling stage, it is a small step, and I encourage the Minister to take the next step sooner than later.

Sir, I share the Member's sentiment about the need for minimum energy efficiency standards. Some countries which have adopted that as a tool have shown that it has proven to be effective

in removing the inefficient products and people therefore adopting more energy-efficient appliances. But we want to take a cautious step as we want to make sure that businesses are able to respond properly and we do not want to introduce a bit of rigidity into our market.

The labelling scheme is an important step. We are making it mandatory this

year, 1st July, because when we started it, the response was quite low. We did a survey and found not many companies are prepared to come on board on a voluntary basis. So, by making it mandatory from 1st July, they have to put the label to indicate the energy that is required for the product, so that consumers can make an informed choice. If we take the next step, which is to establish a minimum standard, any products that require energy beyond a certain level are not allowed in Singapore, we will have to do it very carefully because it means that companies are forced to change some of their product lines. But it is certainly on the table. We will study this very carefully. When will it happen? I cannot give the Member a certainty. But I will assure the Member that NEA will study this carefully as we roll out the energy labelling from 1st July onwards to see when is the right time for us to begin to talk about MEPS. But we will consult the industry widely so that we understand their concerns before we move on to the Minimum Energy Performance Standards.

8. Mrs Jessie Phua asked the Minister for Education what are the provisions for male students who have been or are soon-to-be enlisted for National Service, to be able to repeat their "A" Level examinations.

Mr Speaker, Sir, students who failed the GCE A-level examinations for the first time can repeat their A-levels in a Junior College (JC), provided they are less than 22 years old on 1st January of the year of

repeat. Male Singaporean students who repeat their A-levels in the JCs will be allowed to disrupt or defer from National Service (NS).

For students who have passed their A-level examinations but want to re-take the examinations to improve their grades, they can do so as private candidates. For this group of students, they will generally not be able to disrupt or defer from NS. Based on past cases, some of these students would re-take their A-levels when they are doing their NS.

9. Mrs Jessie Phua asked the Minister for Community Development, Youth and Sports how long does it normally take for foreign athlete applicants to be granted Singapore citizenship.

Mr Speaker, Sir, the Foreign Sports Talent (FST) scheme was started in 1993 as a means to raise the standards of our sports performance, particularly in international competitions. This was meant to provide occasions for national pride as well as elevate our overall standards, leading ultimately to increased local interest and performance in sports. So, ultimately, it is about local Singaporeans. The scheme is administered by the Singapore Sports Council (SSC) and it will consider applications put up by the National Sports Associations (NSAs). These applications must have evidence of comprehensive training plans, competition plans as well as a programme to integrate these foreign athletes into our local society.

All these applications which are supported by SSC are then put up to my Ministry. I personally vet each and every

application, and those which are endorsed are then submitted to the Immigration and Checkpoints Authority (ICA) for approval.

The length of each approval process varies, depending on each case. On average, our foreign-born athletes take about two-and-a-half years to move from employment pass status to becoming naturalised Singaporean citizens.

Sir, I would like to ask the Minister, in view of the IS requirement for qualifications for major games, there are certain time-sensitive factors that we have to look into. Would his Ministry consider setting up an independent unit to help facilitate this application process? This unit can also double up as a resource counselling centre.

That is a suggestion I can consider. But, at this point in time, I do not think there is a rate-limiting factor. The key thing is for the NSAs to be proactive in their planning, recruitment and the programme to evaluate and prepare these athletes for training. I can give this House the assurance that there will be no unnecessary administrative delays in these applications. Like I said, I take a personal interest in each and every single application. So, there will be no unnecessary delays.

10. Mr Siew Kum Hong asked the Minister for Transport what is the rationale for permitting high density lights to be installed on vehicles, especially sports utility vehicles, considering that use of fog lights is illegal except in low-visibility conditions.

Mr Speaker, Sir, Mr Siew

Kum Hong is concerned about the safety implications of the high intensity discharge or HID headlamps installed on vehicles, especially sports utility vehicles (SUVs). The use of HID headlamps is a technological trend in the automotive industry. HID headlamps are more efficient in terms of energy consumption and can improve visibility for drivers, as compared with halogen lamps. As HID headlamps have met the relevant safety standards, LTA has allowed them to be fitted on vehicles registered here.

To reduce the glare caused by HID headlamps, some vehicle manufacturers have incorporated an automatic altering or levelling feature, which automatically adjusts the headlamp angle and direction according to the road and driving conditions so as to minimise glare. This feature is currently not mandated. However, as SUVs are usually constructed with higher ground clearance and, hence, have a higher headlamp position, the LTA is currently looking into requiring SUVs fitted with HID headlamps to incorporate features such as the automatic levelling feature as a condition for such vehicles to be registered for use.

Sir, I would like to ask for clarification on what are the safety considerations that have been cleared for these HID lamps.

Sir, the LTA requires all designs of vehicle lights to comply with the Road Traffic (Motor Vehicles Lighting) Rules, and they must bear approved markings to show that they comply with internationally recognised standards, such as those adopted in the European Union countries, Japan and the United States. The lights must also conform to the stipulated illuminated colour and intensity. For example, headlamps must show a white light, brake lights must show a red light. For headlamps, the LTA requires every unit fitted on a vehicle to be capable of

casting a white light to the front of the vehicle. The intensity and alignment of the headlamp must also be within the specified limits.

11. Mr Edwin Khew Teck Fook asked the Minister for the Environment and Water Resources whether the Ministry will look into working with the Ministry of National Development and Town Councils in providing funds for and mandating the use of energy-saving lights in all HDB flats and common areas to save energy consumption.

Mr Speaker, Sir, I would like to thank the hon. Member, NMP Mr Edwin Khew, for raising this important issue of energy-efficient lighting in HDB estates, as the majority of our population live in HDB estates.

Lighting consumes about 40% of the energy use of an average HDB housing block. The National Environment Agency (NEA) has thus been working with the HDB and the Town Councils to improve the efficiency of lighting in the common areas of HDB estates for some time.

The common corridors of HDB apartment blocks already use fluorescent lighting, which is energy-efficient. However, there is still potential for improvement, for example, by switching to even more efficient types of fluorescent lighting and by using electronic rather than magnetic ballasts. Over the years, HDB has replaced lighting in the common corridors with more energy-efficient lighting, in tandem with technology advancement. The conventional ballasts have also been replaced

with low-loss ballasts. NEA will continue to work closely with HDB and the Town Councils, as well as principal lighting manufacturers, to explore ways to further reduce energy usage in HDB estates.

NEA is also working with the Town Councils to improve the energy efficiency of the common areas of existing HDB estates. In 2004, NEA provided co-funding of about $60,000 for an energy audit of common area services in 40 blocks under the Aljunied Town Council. The audit identified potential savings of about 14%-19% of electricity consumption through various measures, such as using more efficient types of fluorescent lights. NEA has shared the audit findings with other Town Councils and also placed the findings on the National Climate Change Committee website to enable others to benefit from the study. Since then, some Town Councils - and I understand about nine Town Councils - such as Holland-Bukit Panjang Town Council, have implemented recommendations from the audit, for example, installing more energy-efficient lighting as well as energy-saving devices, etc.

For households, as my Minister had noted in his recent reply to Dr Lim Wee Kiak in Parliament, the lifetime cost savings of using an energy-efficient compact fluorescent lamp can be around $110, far exceeding its higher upfront costs. NEA will thus focus on public education to encourage households to use more energy-efficient lighting, as well as to make other simple lifestyle changes to reduce electricity wastage. Changes such as raising the temperatures of air-conditioners or turning appliances off at the switch rather than putting them on standby mode would help households save money and curb rising electricity consumption.

Sir, I just like to ask the Senior Parliamentary

Secretary whether it is possible right now, when we see that there are so many proven situations, even with regard to Bukit Panjang Town Council, that there are positive savings, why can the Government not take the next step at this point in time to mandate the use of these lights at least in the common areas? I understand that there is a higher amount that we have to pay basically to incorporate this and we know that the long-term savings are that these lights actually last much longer. Most energy is consumed in all HDB common areas. I think we have gone past the stage of pilot testing. Through SPS' own Town Council and also Bukit Panjang Town Council, it is reported that there are all these positive savings. What is stopping the Government from taking the next step?

We share the concerns of the Member and we are also very mindful of the benefits of using energy-efficient devices, and therefore to encourage as well as get more people to come on board. In fact, for the HDB estates, and as the Member rightly pointed out, common area lightings, for instance, actually consume about 40%, which is the largest energy consumption usage for common areas. HDB, together with NEA, has been working on implementing and installing energy-efficient lightings in all the common corridors. So all HDB common corridor lightings are actually fluorescent lamps which are energy-efficient. But, as I noted earlier, there is still room for improvement because as technology advances, even the energy-efficient fluorescent lamps can be improved and therefore there are even more energy-efficient ones. HDB has a policy where for new housing estates, it will use the best available energy-efficient lightings for the common areas as it builds them. So, this is taken care of.

In terms of existing HDB estates, we are working very closely with the Town

Councils as well as with the lighting manufacturers. Many of the Town Councils are already on board to change the fluorescent lamps which they have in the common corridors to even more energy-efficient ones, which are the T5 lamps. In fact, they also actually implement various other energy-saving measures, such as using dual switches and circuits and so on, as well as energy-saving devices in the switch rooms and using, say, electronic ballast rather than magnetic ballast. These would be gradually implemented by the Town Councils because the fluorescent lamps will have to be replaced due to cyclical maintenance, rather than actually replacing them when they are still viable. So, they will be taken into account.

As far as the households are concerned, like the Minister mentioned earlier, we prefer to take a cautious approach. We feel that the critical first step really is to raise public awareness about the benefits of using energy-efficient lightings in the households and to work with the lighting manufacturers to give more consistent and accurate labelling of such energy-efficient lamps, so that the households can make informed choices. In fact, we feel that through this effort, the adoption of energy-efficient lamps

by choice, rather than by force, will probably have a more lasting and effective impact. Nonetheless, we will be monitoring the results carefully and we may consider implementing a minimum energy performance standard. If we do that, inefficient models will actually be phased out.

Mr Speaker, Sir, although MEWR is working with the lamp manufacturers, I think for the household itself, it is really the fittings because a lot of the light fixtures are not able to handle the energy-saving bulbs. She may want to work with the suppliers of light fixtures

to look into that as well, in terms of delivering and bringing in such fixtures that allow for energy-saving bulbs. The other point is that I would like to thank MEWR for co-funding the energy audit in the Aljunied Town Council.

I want to thank the Member for highlighting that. It is true that for some fixtures, there may be an issue. But as more and more of these are manufactured, there would be energy-efficient lamps which are able to fit into most of these light fittings.

Order. End of Question time.

Resumption of Debate on Question [9th April 2007],

"That the Civil Service Salary Revisions be considered by Parliament.". - [Minister for Defence].

Question again proposed.

2.18 pm

Mr Speaker, Sir, allow me to start my speech in Malay.

(In Malay): [For vernacular speech, please refer to Appendix A *.] Mr Speaker, paying a reasonable remuneration to our civil servants and our appointment holders is an important principle to ensure that the Government is able to uphold its integrity and attract the best talent to compete in a globalised environment. However, there are a few perspectives in this issue. Many have already been said by my fellow MPs. Therefore, I will not go through them in detail.

For junior officers, whereby there are 60,000 of them, I fully agree that their salaries have to be competitive, for example, a graduate who has just joined the service for a specialised post like an accountant, and even teachers who form a sizeable component in the civil service. I believe our people deserve the best service from the frontline staff up to the senior officers, be it in administration, policy or education. Therefore, I am of the opinion that it is important for us to revise their salaries so that they are as competitive as what are being offered in the market because the number of resignations at this level will be higher if the salary is less attractive.

At other levels, like officers in the elite group, ie, scholars in the Administrative Service, Permanent Secretaries and office-holders, their salaries are benchmarked against the elite group in the private sector, that is, a small upper-class group in the industry. It is a substantial salary scale, one which an ordinary man like us finds it hard to accept.

I work in the private sector where our salary is pegged to risk, reward and profit. It depends on factors, such as effective cost management, fully optimising the limited human resource and financial capital. Because of this, the issue of civil service pay raises various discussions and matters on what would be a reasonable amount.

This raises a question: should those who serve for the people not have the heart to serve and a big pay cheque should not be their ultimate mission? Then another point at issue is whether certain Ministers deserve to be paid at a benchmark comparable to the private sector had they joined the private sector based on their qualifications.

Let us put these issues in the right perspective. Since 1819, Singapore's survival was based on its role as a

business hub. We did not have rich resources like many other countries which are able to handle any changes in a global economy. As emphasised by Minister Mentor Lee Kuan Yew, we should view this from our regional context. Our economic stability cannot be too dependent on our neighbours. We are not like Europe or Asian countries like Hong Kong which has an intensive economic policy and is also driven by stability and development in the region. However, the challenge for the Singapore Government is to ensure that our economy is working smoothly to enable us to generate social programmes, like education and healthcare.

Duties and responsibilities of office-holders and civil servants are not straightforward. Not only expectations from the people are high, but there is also competition from our neighbours and we must always remain ahead.

Political leaders and civil servants have paramount duties to place Singapore on the world trading map. Without them, we will not have a healthy economy, what more to have social programmes or job opportunities.

Recently, I joined PM's delegation to Japan. In a dialogue session with the Japanese leaders and well-known figures from their corporate world, I kept asking myself why would a country as big as Japan be willing to spend time discussing and have dealings with us. Our trade is far much smaller, as compared to theirs. Our contribution to their economy is also not that substantial. However, there is a value that our Government and leaders possess that cannot be found elsewhere. That is our value-add. With our small trade contribution, it is hard for us to get a special treatment. But Singapore is still the favourite of international companies and is still attractive to investors from other countries.

This shows that our Government has done an excellent job to compete in the economy, despite our small size and limited resources. We need leaders with calibre, like professionals and entrepreneurs from the industries, and we have to pay them reasonably. We need leaders who can translate vision into reality, understand how the economy moves, know how to deal with the industry and, at the same time, serve the people.

Let us look for the best in the industry because the situation and the challenges faced by Singapore are becoming more challenging. Competition to acquire talent will be more acute and there is a risk to it. Therefore, we should go back to the main issue. Did we benchmark correctly in setting the salary scale? Would it not be better if a committee or a panel study the appropriate salaries for the civil servants and Ministers?

In my opinion, the principle is right. The question is not on what is the appropriate rate, but the basis on how we benchmark and what are the comparable risks and rewards when compared to the private sector. I am of the opinion that we should have a more conformable benchmark, and not only focus on the top corporate earners. Similarly, with the performance benchmark expected of our civil service.

I am convinced that we need the best talent in the Government. But I am also convinced that we need Ministers with the heart to serve and not be doing it for the monetary reward.

Mr Speaker, please allow me to continue my speech in English.

(In English): Mr Speaker, Sir, firstly, I would like to commend the Prime Minister and the Cabinet for raising the issue of

salaries for public scrutiny. This is indeed the hallmark of a transparent and open Government that will make tough decisions even at a political price.

*Cols. 535-538.

I agree with the principle of the civil service salary scale of a finite quantum and away from perks, and one with all the cards laid on the table - a package that dispenses with perks, particularly those that do not benefit the community directly and those that are not visible.

If we had not been transparent, our situation could have gone otherwise. There are many examples of other governments out there, but let me pick one that was very recent. The BBC recently reported that the Jakarta Parliament voted to pass new laws to reward government officials with free burial plots in the city. Plots at the front, with easy access to the roads, command the highest prices, and people have had to queue for years to get suitable plots for burial. But the law will ensure that these sought-after spaces will be allocated to government officials and veterans.

Sir, I have no idea what burial plots have to do with attracting the best of talents, nor how will it benefit the larger segments of society. Therefore, I think we have to take the fact and appreciate that all we are debating and arguing upon is that finite sum and what is on the table to be discussed.

Sir, I am realistic that in this current environment, we should pay the right price for that finite quantum for the right talent. I fully support this principle. We have to do what is necessary to ensure that Singapore can attract and retain capable people to make up the Cabinet and its civil service. It has been 13 years since we first debated on the issue, and yet we are still debating over it now. Is it

just politics of envy? Did we not get the benchmarks right? Have Singaporeans not recognised the value-add the civil service has brought directly to their lives over the past 13 years? Or, perhaps, we have just taken our security blanket for granted, think that we have arrived and have a false sense of security on how vulnerable we are in this global economy.

By paying top dollars to retain the civil service elite, I hope that we are not sending the message that there are people out there who are indispensable, especially with the intention we place to be protected for life. On the other hand, have we also considered that, perhaps, the Government has priced itself out of the market? How many Permanent Secretaries have we lost? How many Administrative Officers have we lost, where the reason cited is the lack of pay? Is that a good thing for Singapore if the young leadership of our civil service is not challenged enough? Perhaps, as Ms Phua has also alluded to, a stint in the private sector would do them and our economy good. And if they have the heart to return to serve the public, then I think we have the right people in place.

One question I have is the assumption that good leadership and visionaries can only consist of the most intellectual and that money can attract them to serve the people of Singapore. If we cannot find 25 good men and women to serve as Ministers and Permanent Secretaries, and perhaps another 25 more for the next generation, out of our population of about five million, then, I say, politics begets politics. What values have our policies inculcated in our society, because you will not be poor - in fact, sufficiently well-to-do - as a Minister or Permanent Secretary, but surely you can sacrifice being super-rich?

But I am willing to go with greater emphasis and transparency on performance. I welcome the Defence

Minister’s Statement that the Government can improve its performance measures. However, though the idea of specific KPIs are not new, I do not see why these cannot be implemented in the short term. The balanced scorecards and performance report cards of the various agencies and senior officials can contain various views - long-term, short-term, mid-term. We can still keep the traditional KPIs. But we can surely include some short-term KPIs relevant to Singapore’s current needs, such as to lower unemployment, raise skill levels or improve healthcare or welfare service delivery.

Measurements, I believe, drive behaviour. But the Government should also make these transparent so that the public can decide at the end of the day if they have been well-served, and let the civil service calibrate its efforts each year against its performance. I think that the issue on the salary is partly due to public perception of the value they are getting out of their taxpayers' dollars for the administration of the country. I think the word on top of many people's mind is 'value-add'.

Singapore's transformation from here on is not likely to be in leaps and bounds, as in Minister Mentor's Cabinet, which had taken us from Third World to First. The issues today are complex and, therefore, it is more relevant than ever to have deeper and transparent KPIs that we can show direct value to the community. This, I think, will benefit all parties, especially the PAP, at the polls every five years.

Mr Speaker, Sir, I subscribe to the view that our political leaders have to be more than just managers of our livelihoods, our economy and our future, as pointed out by my parliamentary colleagues before me. I fear this huge salary adjustment may erode the respect for our leaders and the honour and

prestige of being a Minister or a top civil servant. I cannot help but wonder: by making it too comfortable for our leaders - political and civil service officers - will we erode our work ethic, heart for servitude and compassion for our people, much the same way we fear that increasing financial assistance for the poor will erode the work ethics of the working population? Think - how many lives and livelihoods are at stake, if our policy-makers become too comfortable and disconnected from the realities of ordinary Singaporeans?

Perhaps, I am an idealist, maybe naive as a first-term MP. I stand on the other side of the scale from "Old Swee Say" at 32, not 52. I am an idealist, but perhaps that is why I stepped forward, not because of the $11,900 then or the $13,200 now. This post-65 idealist would like to see leaders coming forward with a heart to serve, honestly and compassionately, leaders who will put aside their personal interests for the interests of Singapore, and not just chase their performance bonuses.

Sir, I would now like to move on to a slightly different topic - on MPs.

Recently, two articles were published by Indonesia Pos on 1st April 2007 entitled: "MPs Work Overtime to Meet Residents", and by Republika on 4th April 2007 entitled "Ways People meet with their Representatives" in Singapore. The reports were based on a group of Indonesian reporters who visited Singapore and attended one of the MPS sessions by Mr Hawazi Daipi to understand the value our MPs directly bring to the population. I think that it is good, based on these reports, that even our neighbours regard our Ministers and Members of Parliament highly for the good work theyput in in direct delivery to our residents and having compassion for our people. And it is indeed commendable that we are constantly acknowledged as

being clean and honest. But I would just like to refer to two points in the articles that got my attention.

The first is from Indonesia Pos: "If democracy is taken to mean freedom to demonstrate, such a form of democracy does not exist in Singapore. But if it is a system of Government of the people, by the people and for the people, the city state practises it every Tuesday night". That is just because Mr Hawazi's MPS is on Tuesday nights. But I think we practise it every other night.

The second is from Republika: "It is important to note however that any assistance given to the people is not in the form of money, and hence is not a form of "money politics", including during periods close to the elections."

I think this somehow brings the whole salary issue back into perspective, that there is a price tag, be it MPs' allowances or even Ministers' salaries, for a Government and a Parliament that are clean and honest and have the interest of the people at heart, and that this system must continue to attract top quality people who believe in serving the greater good of Singaporeans.

Sir, if there was one aspect of the Minister's Statement that concerns underpayment - I know that words like "underpayment", "underpaid" and "not enough" seem to be rare in this debate - it would be the administrative costs to support the MPs, ie, the LA and SA allowances, to give MPs greater support to serve the people better. We have seen how the MPs are already well-regarded out there and we also know that demands on the MPs to support the public are different from the political office-holders who have the Ministries' backing. Compared to the support that is given in countries such as the UK,

Australia, or even many other countries out there, the current administrative support given is a bit too low. Who can we get to effectively assist the administration with such an allowance, ie, $1,300 for a legal assistant and $500 for a secretarial assistant? I think most of my parliamentary colleagues would appreciate greater support, since the MP's job is truly a full-time one. For example, in countries such as the UK, the maximum entitlement to staffing allowance per member is about the same as the MP's allowance. This is designed to pay for between two and three full-time equivalent staff. I would be willing to settle for a decent wage for two full-time administrative staff. I am not even asking for a benchmark for top secretarial salaries.

This salary issue is certainly a delicate one, not just one that raises questions on our value system as a Government, but also questions the incremental value-add our citizens will expect, as more taxpayers' dollars are being put into the salaries of civil servants. Perhaps, this idealist - and I think there are many more out there from my generation - looks for more than just intelligence and calibre in our leaders. Even with a financially-rewarding civil service, I hope that we can continue to get leaders with a heart to serve, a Government that can drive the heartbeat of the economy, and a leadership that can win the hearts of the people.

Sir, I support the motion.

2.41 pm

Mr Speaker, Sir, thank you for this opportunity to speak in this debate.

The arguments raised by Members of this House over the past two days have reminded me of the words from a Beatles song that goes: "The best things in life

are free, but you can give them to the birds and bees, I want money. That is what I want." These lyrics, courtesy of Lennon and McCartney, starkly capture the two competing paradigms which have driven this debate over salary revisions for political office-holders and civil servants.

Firstly, we have the argument from the perspective of the market. Secondly, the argument from the imperative that public servants must possess moral authority, which might be undermined by the perception that they are receiving salaries pegged at too high a level. The problem is identified as the need to attract and retain the best talents to helm positions of political leadership and to staff the elite Administrative Service. The method adopted is to pay top dollar for the best and brightest. Of course, the salary revisions have a broader reach and also affect the administrative rank-and-file and teachers. I applaud the measures taken to recognise and reward them for their significant contributions to society.

My remarks today are primarily directed to the issue of salary revisions in relation to Cabinet Ministers and top civil servants of Superscale grade, as this has been the focal point of public interest and debate amongst our citizens, netizens, denizens and other interested observers of our small island. Both the Cabinet and the Administrative Service bear the onerous task of crafting and implementing sound, far-sighted national policies on which our national welfare depends. Diligent effort and wisdom are obviously required.

Let me say from the outset that it is a given that our leaders and those who execute their policies should be paid well. This is a safeguard against corruption. A corruption-free government is foundational to the well-being of a nation. The difficulty is to find the right criteria and mechanism for determining just remuneration and reward. I agree

that Ministers and top civil servants should not be expected to make "unreasonable financial sacrifices" to be in public service. The devil is in the details - how is this quantified?

Hon. Members have voiced reservations questioning whether pegging salaries to the top earners in six private-sector professions is the best approach. Does it achieve the desired end? Does it communicate the right message? Are public and private-sector jobs comparable? Are we making a mountain out of a molehill, as the revised annual wage bills would constitute just 0.022% of the total economic output?

Mr Speaker, Sir, I will now turn to the market argument. The logic of the market perspective is the need to be competitive so that top talents can be attracted to serve the Government. This would facilitate the political renewal of the incumbent Government and ruling political Party. The chosen measure is to benchmark public-sector salaries against top private-sector salaries to position the Government to compete for the same or overlapping pool of talents by closing the salary gap.

The dominant motif of this camp is to be realistic and its chief tool is that of financial incentives or market-based wages. This rejects as flawed the conventional wisdom that Ministers should only be paid a modest wage because they do public service. The new orthodoxy is the need to pay Ministers well to ensure a constant supply of good governors who would perpetuate good government and high economic growth. It posits that just as a CEO determines the profitability of a company, so too a country's economic well-being is contingent on high ministerial calibre.

The analogy between a company and a country is imperfect. What serves the corporate world well does not necessarily translate into what will serve good government well. Although our country

has been described as Singapore Inc. and Hotel Singapore, it is more than that - it is our home. A home evokes affection because it carries intangible qualities of warmth, security, space, which a hotel, no matter how luxurious, can never fully possess.

Sir, I now move to the second paradigm of the moral leadership argument. The argument from moral authority seizes upon the idea of intangible virtues. It is motivated by the fear that the market-based wages model will attract the wrong people who are motivated primarily by money rather than a desire to serve the public. There is an expectation of some degree of altruism from governors. While this may be criticised as naive utopianism, the alternative, a cynicism and total capitulation to materialism, is itself tragic in sounding the death knell for the ideals we need to temper our selfish excesses.

The existing concern and perceptions that Ministers and top civil servants are being paid too much have been exacerbated by two things: one, the impending GST hikes and, two, the adequacy of public assistance for the most needy in our society, some of whom reportedly eat only one meal a day. This plugs into the existing unhappiness generated by the growing levels of income disparity in Singapore. A person earning about $2,000 a month may find it hard to grasp the need to increase the pay packets of "million dollar" Ministers who currently take home about $40,000 per month, or Elected MPs who receive almost $12,000 per month.

There is an emotional disconnect in this respect, particularly when the green-eyed monster of envy rears its head. The emotional disaffection can impair the

health of a representative democracy where MPs, as the people's representatives, are supposed to understand the struggles of the common man and to represent such concerns. Wealth can be a socially divisive factor, spawning discontent and alienation, particularly where the salaries of Government leaders are well above the national average.

Sir, the fact that this emotive topic is being freely debated in Parliament today shows that we value transparency, a facet of good governance which guards against corruption.

Mr Speaker, Sir, I would like to highlight another facet of good governance, which is accountability. This comprises two elements. First, the ability to measure whether an office-holder is performing well or badly in qualitative and quantitative terms. KPIs or other benchmarks are necessary to evaluate the Government's progress, or regress. This is relevant to how much Ministers and civil servants should be paid and a performance-based variability component to salaries may facilitate this.

Second, there needs to be a sanction for poor performance, as in the private sector, where poor performance could cost the loss of a job.

Some may argue that while Ministers and top civil servants enjoy the rewards of the private sector, they do not suffer such risks of the disciplining force of the market. This may not be entirely accurate in so far as assurances that the Administrative Service is no longer an iron rice bowl, as under-achievers may be asked to leave, is realised. It may be argued that political office-holders are accountable to the shareholders of Singapore Inc., to Singapore citizens, who can exercise the sanction of the ballot box through their votes every five years or so. If this is the case, then it may be said that Ministers do not enjoy guaranteed

long-term jobs, which is a risk associated with the nature of political office.

Elections are, however, a blunt tool for sanctioning under-performing political leaders. They are periodic rather than continuous checks. Voters may still support a Government as a whole even though it is concerned with a few errant or under-performing Ministers. To be frank, to say the electorate can judge the Government through elections is a bit of a fiction. The ultimate sanction provided by a system of parliamentary democracy is that the incumbent government can be replaced by an alternative government. For this to work, a sizeable parliamentary opposition is needed. The current one is Lilliputian in size, though not necessarily in heart.

The current political system favours the continuation of a dominant party state. Despite these sterling efforts of the hon. Members for Hougang and Potong Pasir and NCMP, Ms Sylvia Lim, I do not think we will see a functioning bipartisan system anywhere in the short to medium term. This may be cause for rejoicing or mourning, depending on your political affiliations. However, this means that the task of holding under-performing or incompetent Ministers accountable falls on the Prime Minister and the internal self-regulatory mechanisms of the ruling political party. This may not always be effective or transparent enough to allay public concerns.

In terms of accountability, the question that may be asked is: how can you write your own salary without an external auditor? In this respect, I commend the proposals of various hon. Members to have an independent panel to review the issue of benchmarking salaries. This would promote accountability and, in involving non-Government sectors of society, could inject a participatory element which strengthens democratic governance. To further promote

transparency, the Government could widely disseminate how the performance of each individual Ministry is evaluated.

Mr Speaker, Sir, I would like to raise a question whether the wrong message is being sent to my generation, the post-1965 generation, in conceptualising reward and structuring incentive in primarily monetary terms. Are we not sending the wrong message in assuming that throwing money after a problem will solve it? In conveying an overwhelming market-oriented ethos, are we not discounting intangible values which are essential for nation building? The underlying ideology of profit maximisation which can breed a fixation on self-interest stands at odds with attributes of selflessness and dedication to the common good. Ms Denise Phua cautioned against the volatile mix of power and excessive emphasis on materialism yesterday. I concur entirely with her sentiments. Power corrupts and absolute power corrupts absolutely, as Lord Acton famously opined; wedded to a lust for lucre, the danger to the common weal increases exponentially. Corrupt governors wielding the coercive power of the state can wreak havoc on the body politic.

When it comes to our political leaders, surely, what Singaporeans want are men and women of character and vision to steer the ship. One is willing to follow where one is inspired and leaders must lead by example through sacrifice and service. For better or worse, our leaders influence us and shape our common destiny.

Sir, my generation, the post-65s, are the beneficiaries of the wisdom and foresight of our forefathers which have raised Singapore from the Third to First-World status. This is a remarkable achievement which second and third generation leaders have consolidated. No country is perfect, but Singaporeans are grateful for the peace and prosperity we

have enjoyed and hope to keep enjoying. We are not oblivious to the challenges that continue to face the Government and people of our country.

Yes, we need talented leaders to lead us into our collective future. In addition, we need a people who have a vision of what it means to be a Singaporean. What is 'Singapore'? We are not just a company, we are a nation. But we need a vision of what this means because without a vision, the people perish, they cannot gel together, they become selfish, cynical, alienated atomistic individuals preoccupied with their own concerns.

Our founding fathers had such a vision. On 9th August 1965, then Prime Minister Lee Kuan Yew issued the Proclamation of Singapore's independence on behalf of the people and Government of Singapore. This stated that "Singapore shall be forever a sovereign democratic and independent nation, founded upon the principles of liberty and justice and ever seeking the welfare and happiness of her people in a more just and equal society." These are worthy ideals we should constantly revisit. These ideals are foundational to our constitutional order which can inspire in us a sense of national pride and identity.

The Minister Mentor had a vision. First, it was for a Malaysian Malaysia, rather than one where the constitution entrenched unequal rights on the basis of race. When we seceded from the Federation, the vision for Singapore was that of a multi-racial democratic society where meritocracy was key to social mobility and indeed social stability.

I recall a conversation I had with our first Chief Minister, David Marshall, shortly after he returned to Singapore from his ambassadorship in Paris. He always spoke of the need to have "chilli

padi in our veins." His passion and his wit were invigorating as was his patriotism. Ever the idealist, he nevertheless acknowledged the central role of the Minister Mentor in spearheading Singapore's tremendous economic success through policies based on hard-headed economic rationality and the will to push through unpopular policies which were later vindicated.

We are the beneficiaries of the successful execution of this vision of our forefathers. Their sacrifice and foresight are inspiring and worthy of emulation. Minister Mentor himself gave up what would certainly have been a lucrative and distinguished legal career because of his vision and commitment to Singapore. The post-65 generation has enjoyed peace and affluence but we also face the uncertainties and insecurities wrought by globalisation, terrorism and other pressing concerns. For Singapore to be able to negotiate these 21st century challenges, it needs to be socially cohesive and resilient. This depends on the character and identity of its people and a common unifying vision for our nation which transcends the joint pursuit of material wealth. The intangibles count. Civic virtues like patriotism, honour, duty, a commitment to the common weal, may be difficult to quantify, but are as real as the wind we cannot see.

We need a vision for my generation which transcends instrumental objectives or which conceptualises things primarily or exclusively in pecuniary terms. It is sad to think that no good people will come forward to serve because 'money no enough'. But, Sir, we are not merely atomistic, profit-maximising individuals, evaluating opportunity costs and benefits. The call to service is a noble one. Therefore, in tandem with a generous pay package, job satisfaction and other intangibles should motivate future Ministers and top administrators. There is more to life than seeing things through

the dominant lens of money and human resource management. Virtues, like loyalty, sacrifice, perseverance, sustain hope that a nation will endure and become great.

We do not do things merely because of financial reward. I think of my father who represented Singapore as a swimmer and water polo player for 12 years, including at the 1956 Olympics in Melbourne. As a university student and later a practising engineer, he trained everyday in preparation, paid for his own expenses, food and even swimming trunks. He never received a cent. He never got a bonus when he won anything. In material terms, all he got was a medal and a jacket with the Singapore crest for his efforts. This sufficed for him. In non-material terms, he speaks to me of the tremendous joy in winning, the honour of representing Singapore and the fellowship of his team-mates.

Perhaps, I have been influenced by my father. When I graduated from Oxford, I was offered a teaching position at the NUS Law Faculty. The lure was the promise of a Masters scholarship which came attached with a three-year bond. At the end of the three years, I had a better understanding of what the job entailed. I felt that I had built something worthwhile. I could have joined, I suppose, a good law firm and practised corporate law. Perhaps, I might even have been in the running to become one of those persons against whom Ministerial salaries are benchmarked. But I chose to stay on as a university don. Indeed, for many years, my students frequently asked me when I was leaving for practice as, in fact, many of my colleagues had done. However, I found immense satisfaction (and irritation) in being an educator and scholar. There were other things which added value to my occupation which outweighed the material rewards of legal practice. One might think that a top

administrator at age 32, after completing her bond, may find similar satisfaction in her job scope, aside from pecuniary compensation, to motivate her to stay.

All the more so a Minister. The position of Minister is a position of high honour, great power, which is accompanied by great responsibility. A Minister may be able to command a greater salary in the private sector. However, as a Minister, he or she is uniquely positioned to build an enduring legacy - to solve healthcare woes, transportation problems, to keep the economy humming and thousands of Singaporeans employed, to sustain friendly relations with neighbouring states. It is a privilege to be able to build something of enduring worth in our lifetime.

Greatness is not measured in purely monetary terms. Otherwise, we would celebrate mercenaries, not patriots.

The market is a marvellous motivator, but it can lead to insularity, selfishness and the I-come-first mentality. My concern is that if we conceptualise the worth of our Government leaders in predominantly material or monetary terms, an over emphasis on market values may send the wrong message to my generation. After all, the worth of a person does not turn on how much he earns. One's sense of duty must perhaps coexist with other motives, but where does prudence end and avarice begin? When does the impulse to reward someone for a job well done cross the line and descend into the realm of greed?

I appreciate the need to pay Ministers well, but in devising an appropriate formula, there is a need to be vigilant in light of public unhappiness to strike a median between austerity and excessive prosperity.

Minister Lim Swee Say spoke of the need to have leaders with thinking heads, caring hearts and clean hands. To this recipe, I would add the quality of

sacrifice, of putting others first, a certain liberality of spirit that is manifested in sincerity, courage, generosity and service. We must take care and be conscious of the message being sent to Singaporeans through this revision exercise, as the underlying assumptions speak of how we value things. Do we value people instrumentally, primarily with what can be quantified? Or do we appreciate the intrinsic worth of things, which is essential to any society which cherishes the principle of human dignity and authentic community?

As our political leaders, we, the citizens of Singapore, are watching you and learning from your example. I hope that when the time comes, my generation will be ready, able and willing to receive the baton of leadership and to view this as a vocation, a calling, rather than a salaried job. It would be a sad indictment of my generation if no one came forward to serve without excessive monetary inducement, because, to be bereft of deep convictions is to be improverished indeed.

3.05 pm

Mr Speaker, Sir, in the last two days, Members have covered many aspects of this contentious issue of benchmarking Ministerial pay to the private sector at two-thirds of M48. The Member for Hougang has comprehensively stated the Workers' Party's position on this matter.

The gist of our position is that we should instead consider benchmarking based on the remuneration of political office holders in countries which tick. They generally favour a more moderate use of taxpayers' money for political salaries, and they do not seem to have run their countries aground.

Today, I would like to examine a few points raised by Minister Teo Chee Hean in his reply speech yesterday, and also to argue why the benchmark of two-thirds of M48 for political office will ultimately be against the national interest.

First, the point raised by the Minister yesterday. Mr Teo attempted to rebut the Member for Hougang's contention that this debate was a waste of taxpayers' money. He said instead that this was a hallmark of PAP's commitment to transparency. While I do agree that this is an opportunity to have a public airing, the debate arouses a feeling of deja vu, harking back to the other transparent debate about whether to have casinos in Singapore. This revision is presented to Parliament in the form of a Ministerial Statement under Standing Order where no vote will be taken. Not one thing said by any MP will change the decision of the Government. Personally, I would very much like to hear what each individual Minister feels about taking $2 million of taxpayers' money home each year, while fellow citizens struggle with the rising cost and taxes.

Secondly, Minister Teo mentioned that it was not right to look at how much political leaders elsewhere earn, because our Ministers cannot become Ministers in other countries. But the comparison is logical because we are comparing similar skill sets and responsibilities, funded by the public.

Looking instead at our benchmark of two-thirds of M48, how valid is it as a measure of a Minister's worth? Is it possible that, in fact, some of our Ministers are doing better in Cabinet than they would have done in their previous careers? Can we say that each and every Minister in Cabinet now would have become a top-earning banker, accountant, lawyer, engineer or CEO? We have all seen instances of civil servants and military personnel embark on second

careers in the private sector, and find the business world a whole new ball game and some, in fact, flounder.

Thirdly, the Minister attempted to show that Cabinet salaries were not in the rarefied zone of high flyers by plotting a graph of 1,000 residents and Malaysians. Even so, l,000 out of the resident workforce of about 1.9 million is less than 0.1%. To be in this group of 1,000 is already to be in a very privileged few and, as far as the public is concerned, is already in the rarefied zone.

For the remainder of my speech, I would like to argue why the two-thirds of M48 benchmark may ultimately be against the national interest. Economists have noted that globalisation increases income disparity. As such, the top earners' salaries will, in all likelihood, move up further in the future. A few years from now, two-thirds of M48 may require us to endorse each Cabinet Minister's pay for $3 million or $4 million annually. As these pay packets are funded from taxes, including poor people paying GST, how far is the Government prepared to go with this? Does it have a threshold of unconscionability?

Next, what makes a good Minister? There may be differences of opinion but, fundamentally, political leadership is a different creature from administration. To add value to policy making, the Minister must play the role of politician. He should understand the public sentiments and aspirations and be able to fund policies and explain things plainly to people. He must lead not just with the head but with heart. His ground feel of the need of the people and understanding of their plight distinguishes him from the professional civil servant who usually focuses more on efficiency and expediency in implementation. Indeed, to be effective, a Minister's EQ may be more important than for him to be part of a Mensa club. In fact, he would be better if he was wired

differently from the top civil servants, to reduce the mistakes perpetuated by groupthink.

Minister Mentor Lee Kuan Yew previously justified why it was not feasible to have foreign talent in the political leadership. He said that political leadership should "have passion, the commitment and share the same dreams as the people." I agree. The question is: how will two-thirds of M48 affect empathy, the ability of Ministers to share the same dreams as the people?

Ministers are currently drawing about $1.2 million annually, which divided by 12 will be about $100,000 a month. How does this compare with the average person?

According to a Report of the Labour Force in Singapore 2006, the median gross monthly income of someone in full-time employment is $2,170. In other words, an ordinary person takes a month to earn what a Minister earns in half a day. For university graduates, the median gross monthly income is about $4,450. This would take the Minister about one day to earn.

As we move salaries up to 88% of the benchmark, we will find that the average worker's monthly pay may be earned by a Minister in a matter of two or three hours. Does the Cabinet not feel a tinge of discomfort, drawing taxpayers' money at such rates? Can Ministers and Singaporeans share the same dream? Another reality is that our leaders may face problems in marshalling the people to make sacrifices for the country.

About four years ago, Minister Dr Vivian Balakrishnan told the House that his son had asked whether one should be prepared to die for Singapore. This sparked off a heated public debate. The cynics invariably linked this question to

Ministerial salaries. To quote a member of the public, and I paraphrase, "Who are we trying to kid? Before we start talking about dying for Singapore, let us look at our leaders. We are told that we cannot get good leaders unless we pay top dollar. So why expect more from the rest of us?"

Citizens should be able to look to leaders for moral leadership and inspiration. If what they perceive are mercenaries at the helm, then asking them to make sacrifices will be met with cynicism and indifference. This will not bode well for Singapore's future. What will happen when crunch time comes? Is this a time bomb planted for the future of Singapore?

Sir, if we are seriously unable to interest good people into public office, we must ask why other countries can do it and we cannot. Is it just the money or the fact that we have not invested in creating a culture of high public spiritedness?

In some countries, there are young people who aspire to hold public office. Senior Minister Goh had previously told Parliament that we could not expect Singaporeans to behave like people in other countries because we are a young nation, and people still see things in material terms. How sad! After 41 years of nationhood, National Service, and National Day Parades, what do we teach our children? Do we judge a person's worth by his salary? If so, we have wasted millions of tax dollars on these nation-building efforts, which have truly been in vain.

Public service must remain a noble undertaking for which people are prepared to make sacrifices in exchange for the benevolent power to improve the lives of

others. If we corrupt this by money, we can be efficient but never a country of high ideals. As such, I cannot agree with the Members who see political office as yet another career choice. It must be more than a job and the holder must be able to think of others besides himself.

In the popular American comic strip, "The Wizard of Id", there was a public address by the King to his subjects from the royal balcony. The King began, "Remember the golden rule". One of the subjects called back, "What's that?" Back came the royal reply, "Whoever has the gold makes the rules."

If the gold is indeed taxpayers' money, then Singapore is not that far from the Kingdom of Id. And it does not matter what transparency the Government has claimed in its attempt to justify the pay hike.

3.12 pm

Sir, we have been talking largely in terms of digits and formulas in this debate on salaries. People read the headlines screaming that Ministers' salaries will go up by 33% and they go, "wahh", and they read about how the Prime Minister's pay will go up to $3.1 million, and they go with an even bigger, "wahhh". They cannot grasp these mind-boggling figures.

But there is a human dimension involved in this debate and we must not lose sight of that. Behind these numbers are human beings with not only exceptional abilities but with exceptional life stories, which speak much of their character and the sacrifices they make to serve our people. Indeed, there are sacrifices made to join politics even after the proposed adjustment to salaries. People may forget but Cabinet Ministers take personal risk as well as pay a price as they toil to improve the lives of Singaporeans.

To illustrate this, I would like to tell a tale of two Lims. These two Lims, who were trained to be naval architects, had promising careers before being called upon to join politics in their prime. They later became Cabinet Ministers. Both served in the labour movement as its Secretary-General. I would say that this is one of the most demanding jobs around, one of the most unglamorous but one of the most important. Ultimately, it is about jobs and securing a better life for our workers.

The first Lim is Lim Chee Onn. He left the civil service in 1977 to join politics and was assessed highly by the then Prime Minister Lee Kuan Yew for his high calibre. Two years later, he became Secretary-General of NTUC. In 1980, he was appointed Minister without portfolio when he was just 36 - a high flyer. In his years in NTUC, he helped to modernise the trade union movement, emphasising the need for workers to upgrade skills and increase productivity. Among other initiatives, he also inducted scholars and professionals into NTUC to provide planning and research back-up.

But his style led to problems with old-guard unionists and it was not an easy time for Mr Lim. He resigned from NTUC and the Cabinet in 1983 and joined the Backbench. In 1992, suffering from high blood pressure, which he told the PM about, Mr Lim left politics altogether to focus on his corporate work. Since then, he has been making news in the corporate sector, especially in his position as the CEO of Keppel Corporation. Among the latest is the news that Keppel Corporation paid him between $5.5 million and $5.75 million in 2005. This is an amount that not even the Prime Minister will earn.

The other Lim - in this tale of two "Lims" - is Lim Boon Heng. He left a high-flying career in Neptune Orient Lines to join politics in 1980. A year later in

1981, he joined NTUC, and rose to become its Secretary-General in 1993. He occupied the hottest seat in town during the recessions in 1998 and 2001 when he persuaded workers to take a CPF cut and wage cuts to turn the country around. It carried not inconsiderable political risk. It was a very unpopular move. He faced anger from unionists and abuse from workers.

But the bitter medicine worked and the economy recovered quickly. The unemployment rate fell. In good times, he pushed the tripartite partners for the CPF cut to be restored and for wage increases. Now, he is in charge of another difficult issue, which is our ageing population. But for many years in the labour movement, he has been worrying about jobs, low-wage workers, redesigning jobs, and flexible wage system so that workers can have jobs in difficult times. And we know that he leads by moral suasion which many people talked about. He leads by personal example. He lives a simple lifestyle. And I would say that if he succeeds in this task of taking care of our ageing population, we can all grow old a little more peacefully. But his pay today? A small fraction of Lim Chee Onn’s.

I tell this tale of the two Lims to highlight the rigorous demands of political office, especially as a leader in the labour movement, the risks involved, and the stark contrast between the reward systems for high-calibre people who remain in politics and for those who leave it. I do not believe Mr Lim Boon Heng or any of our Ministers would work less hard or be less committed or passionate about Singapore if their salaries remain as they are. But if we apply the principle that we in the labour movement and we in our own private sector lives have been fighting for - for ourselves and on behalf of our workers - pay our workers according to their abilities and performance, why should we adopt an opposing standard when it comes to

those who make it possible for us to enjoy a better standard of living year by year?

If we have a rigorous selection process to put the right high-calibre people in place, they will not be there for the money. They will be there for the right reasons – out of a sense of duty, public spiritedness. The opportunists and the greedy have no place and will have no place in this Government. We have that selection system right now under the PAP.

Among democracies, we are unique in that we do not see politicians jostling for positions or fighting for the spoils of office. We do not see Ministers undermining each other or feeding any leaks to the media about conspiracies or rifts in the political ranks, which is the normal state of affairs in countries such as the UK and US and also in this region. There are no political backroom dealings here. We do not see a long queue of people banging on the door to become Ministers or manoeuvring their way in. We do not see any Minister hankering to become the Prime Minister, however much he may be paid.

This is a clear sign that our Ministers are not there for the positions per se or the monetary rewards that may come with it. They are there out of a sense of duty and mission. But that is no reason for us to begrudge the office-holders their due reward, as a matter of principle. Far from it. Rather than quibble emotionally over their salaries and haggle as if we are at a pasar malam, we should rationally reward the Ministers appropriately, knowing that their job is very complex, demanding and often thankless. We should do so with peace of mind, knowing that if Singapore suffers from any crisis or calamity, when other countries are suffering, we are in good hands because

we have got the best to steer the ship to a safe harbour.

Detractors such as the Opposition tend to argue as if they are standing on higher moral ground. But a closer examination would reveal that, in fact, they are on a very slippery slope that would propel us all back into the Third World swamp that we were just a generation ago. Then, yes, the widening income gap will be a lesser problem because many of us will be wallowing in unemployment and many of our top people would have left the country for better shores.

We have an exceptional leadership which led Singapore into the rarefied league of the richest countries, with the fifth highest per capita income in the world. We are Asia's second richest country after Japan. It is easy to forget that Singapore is an exceptional state, but it is. In his book, “Singapore’s Foreign Policy”, the late Michael Leifer from the London School of Economics, my former lecturer, noted how exceptional Singapore was in its achievements. As he sought to pigeonhole the small country in a category of states, he concluded that Singapore is best represented as sui generis - one of its kind, irrespective of its size. It does not fit the broad categories of small states and micro-states, or of "weak states" which has come to be the common label for small, vulnerable states. He noted that Singapore's exceptional standing and influence come mainly from its economic achievements, with its reputation for excellence.

This reputation for excellence was set by its leaders. Some have argued that, yes, the leaders played an important role in building up Singapore to what it is today, but so did the workers. Of course, the role of workers is also pivotal. They united behind the Government and we overcame challenges together. But let us look at it another way. If the workforce

does not have leaders who put in place skills training programmes and provide high quality education, with various productivity campaigns, will it transform to become the most productive in the world? If the workforce does not have leaders who go all out to woo foreign investors and give them the confidence to pour billions into Singapore, would our workers have the jobs and high quality of life they have today?

Let us take any country in this neighbourhood, say, Vietnam. Its workers are very hardworking, very hungry. I have visited the Vietnam-Singapore industrial park some years back. Some foreign investors tell me that the Vietnamese are more hardworking and more hungry than the Singaporean workers. They learn very quickly. To be fair, I do not think that man to man, the Vietnamese worker is inferior to the Singapore worker. Yet, as a whole, they are not enjoying anywhere near the standard of living that Singaporeans are enjoying here.

We need to ask ourselves, why is that so?

Some detractors couch this debate in terms of moral leadership. But what is immoral about paying people what they are worth - fairly? We are not talking about rewarding layabouts who have shown little passion for Singapore or produced lacklustre results. On the contrary, we have enjoyed the fruits of their labour, and, yes, also of their personal sacrifice.

Let me tell another story. It is about the Prime Minister, and I hope he will not mind this.

In my previous life - before I joined politics - as a senior political correspondent, I had interviewed PM Lee Hsien Loong, then DPM, when he was diagnosed with cancer. This was in 1992. Then, he was undergoing his 18-week course of chemotherapy. Before he

started his treatment, he had led an investment promotion mission to Japan after the doctors had finished with their tests. He was also Trade and Industry Minister, and wanted to meet leading Japanese businessmen to persuade them to invest here. He was also taking along with him Singapore businessmen to help open doors for them to do business with the Japanese. This was just after he was diagnosed, before his chemotherapy treatment.

I think if you ask anyone suffering from cancer, you would know that this is not regular work behaviour. This is extraordinary commitment. The stock market was jittery at the news of his cancer. To give people confidence and to protect Singapore’s interests, Mr Lee spoke to the media about his illness and how he was coping. He consented to be photographed. And I remember that vividly because I was there. He was bald, his face was puffy from the drugs, the tubes were sticking out from a dressing over his chest - the entry point for the drugs to be pumped into his veins. I do not think he allowed the media to interview him for his own sake or because he likes publicity. For sure, it is not. It is for public interest. It was to assure the public and investor that life and business in Singapore were going on as usual. I think if you talk to any cancer patient who is going through chemotherapy, his instinct is to "Please, let me recover quietly. Let me focus on my health." But PM was thinking of Singapore even in his time of need.

When the cancer went into remission five years later, he did not take time off to smell the roses. Instead, he took on the extra roles of Finance Minister and central bank chairman. And then, later, he took on what must be the most demanding and life-consuming job in Singapore, that of Prime Minister!

Sir, I have friends who are cancer survivors. Many said that surviving cancer

forced them to rethink their worldview and their priorities in life. Typical responses of cancer survivors are that they would want to go on adventures, climb a certain mountain, visit Great Wall of China, explore the world or live a more “balanced” life with less stress, spend more time with the family, be more religious, spend more time with the church or the temple. But, here, we have a man in the front row who, after surviving cancer, decided to continue to put first the priorities of Singapore and Singaporeans by taking on the most stressful job in Singapore, being its Prime Minister.

I think few would disagree that the PM’s job is extremely important to the country, if not the most important. His decisions affect our lives. He is the country’s Number One CEO, the chief strategist, the chief visionary, the chief spokesman for the country. But, in the real world, he is ranked presently 164th among income earners. After the revision, he will rank 102nd.

Now, Sylvia Lim said that we are signalling that we are measuring people according to their wealth with this salary revision, that we destroying the notion of sacrifice. But I would say that to rank your PM, the most important job in Singapore, at 102, to me, that is sacrifice. If you go by job worth, by the impact on people's lives, I think the PM's job will easily be in the top 10.

Sir, I cannot comprehend the argument that once you pay a person fairly, with a big discount, the person loses moral leadership to serve Singapore. I have no doubt that the PM is not asking for a salary increase for himself or for his Ministers to give them that carrot to serve. Our Ministers live simple lifestyles. It is to lay the right foundation for Singapore’s future. And to survive

and prosper, we need extraordinary leaders.

I am sure that the question that must be keeping the PM awake at nights is: will he be able to field a top-quality Cabinet for the next generation or two, and can he find one able and willing to be groomed to succeed him as PM? Events in the region have shown how political succession which has gone awry can wreak havoc and instability. Political feuding and infighting can become the order of the day. The Singapore leadership, on the other hand, from the Old Guard days, has distinguished itself in this region by its determined and meticulous approach to the problem of political succession. The smooth passing of the torch from the Old Guard to the second-generation team, and then the third, was the result of decades of careful planning and hard work.

Our problem, if we can call it that, is that we have a pragmatic and unsentimental approach to politics. This can be a strength but also a weakness. A strength because it keeps the people focused on national issues and challenges, which are perennial, and not on political personalities which come and go. This ensures a continuity and a resilience that go beyond personalities in government. But it can also be a weakness because it breeds in people a detachment from the political leaders and politics in general. They get only heated up if it affects their pocket in any way. They also tend to take for granted the work of the political leaders and dismiss their sacrifices.

Sir, it seems to me that this debate is not only a test of the quality and worth of the political leaders but also the quality of our electorate. Without a sound and wise electorate able to see the big picture and discern the true national interest at stake, there will be a steady erosion of people willing to take on the rigours of public office.

Some people make out the debate to be between realism and idealism, as if to pay our Ministers fairly is to give up the ideals of sacrifice and duty. In a related vein, some believe that the salary revisions will cause people to be cynical about politics. Does it follow then that, in countries where they pay their leaders low, and we have many in our neighbourhood, their leaders have high ideals and that their voters hold them in high regard, are idealistic and fan high hopes about their political system? Even in First World countries, with very active democracies, strong two-party systems, many analysts and journalists observe how voters have become increasingly cynical, to the extent that many are not turning up to vote, despite having many political parties to vote for. A reason for the voter cynicism is that they believe that their political leaders are not delivering and that things will not change.

Sir, Sylvia Lim also mentioned that we should benchmark the pay of our Ministers to the pay of the top leaders in other countries. Let us say it is interchangeable. Let us say George Bush is paid so much, and we think that that is a fair wage for a Prime Minister. Let us say we can hire George Bush. I think it will be fair for George Bush when he comes, to ask that his perks be matched as well - like, can there be an Air Force I jet for him? And I hope that the Opposition will lay aside a budget for that. And if you say that, "Oh! There are so many countries that have done very well. They have done very well on the World Competitive Report like Finland and they are paid so much lower than Singapore.

Let us see we can hire the Finland PM to come. His experience is in running a welfare state with high taxes. He will look at our system and say, "Oh, well, your income tax rate is so low." Their rate is about 50% to 60%, if you take the combined top marginal income tax rate. Besides the individual

income tax rate, they also have a municipal tax rate. So their combined top marginal income tax rate is about 60%. And their VAT (which is equivalent to our GST) is 22%. So if you want to compare the salaries of our Prime Minister and the Presidents of other countries as if they are equal, as if they are interchangeable, then bring along their system and tell our voters, "Okay, we have got the Finland PM and is willing to be paid so much, very low. But I am sorry he wants to raise our income tax to about 60% and our GST will go up by 22%." I think our voters, hopefully, will be wise and know where their national interests are.

Sir, listening to this debate, I often wonder what the top people in the private sector, those who have Ministerial potential and also a sense of duty, make of this public debate, their reaction to the salary revision. I will not be surprised if they draw this conclusion: They can keep their money. Life is too short. I will stick to the private sector and draw my better pay, my more luxurious life and not have my worth being haggled out in public. I think sometimes we under-estimate how difficult this debate is for our frontbench and for this Parliament. It is not easy for us to come before the people, but we know it is the right thing to do. And we hope that our electorate is wise.

Sir, I started my speech by saying that we should not lose sight of the human dimension in this debate. By this, I do not mean only the leaders, but also the people.

In the end, if we are not able to attract exceptional leaders who can ensure that Singapore continues to survive and prosper, it will be the people who suffer. And by that time, even if you want to pay the highest salaries possible for good government, it may well be too late.

3.35 pm

Mr Speaker, Sir, before I proceed to speak on the issue of revision of salaries of our Ministers and the civil service, I would like to speak on the salary of a very special group of professionals, that is, the engineers.

The median salaries of the top eight earners for six professions used to compute salary benchmarks for Ministers and Administrative Officers indicated that the earnings of Engineers are a far cry from the other professions. Before our young brains flock to study law and accountancy and shun engineering in universities and polytechnics, I would like to highlight the success stories of many engineering-trained CEOs. I believe a lot of you have seen this article in the Business Times a few days ago. Out of 55 top executives, at least I know that one-third of them are engineering-trained. And on top of the list, Mr Wong Ngit Liong from Venture Corp, his earning is $16.5 million in year 2005. I know that he is an electrical engineer by training. He is not the only engineering-trained CEO who earns multi-million dollars. Further down the list, we have Mr Foo Eng Hiong, Venture Corp; Mr Liew Mun Leong, CapitaLand; Mr Tan Choon Huat, Venture Corp; Mr Tan Kwi Kin, Semb Marine; Mr Tan Pheng Hock, ST Engineering; Mr Chew Choon Seng, Singapore Airlines; Mr David Lim, NOL; Mr Lee Hsien Yang, Singapore Telecoms; and Mr Koh Boon Hwee, though the name is not inside, and the list goes on and on. However, their salaries will most probably be reflected under MNC or local manufacturing among the six professions in the benchmark, not under "Engineers". Furthermore, I believe it is not just by sheer coincidence that more than 40% of our current Ministers and many more top civil servants are engineers by training too. This shows the flexibility of someone with an engineering

background. The engineering training enables them to think sequentially and logically, anticipate problems, trouble shoot, and so forth. Hence, many engineers have done well and move up the corporate ladder. They are wanted to run the companies and also to engineer Singapore into the First World.

However, the present trend of the young and bright opting for more fashionable soft courses gives rise to concern that there will not be sufficient first-class minds with engineering background to continue with our progress and nation building. Perhaps, they were turned off by the remuneration of professional engineers. One way the Government could help is to assist professional engineers in showcasing their contributions through more media publicity, engage local professional engineers in all Government projects with decent fees and, more importantly, remove the jail term for professional engineers in the Building Act.

I did a quick check with my parliamentary colleagues who are from other professions like lawyers and doctors, and they told me that they do not have jail term specified in the Act governing their professions. In the long run, if our younger generation does not take up engineering, our country could be heading for disaster.

Similarly, if all our bright civil servants are drawn away by the private sector or, worse, by other countries which would not mind paying top dollars for our top civil servants, then I am really worried for the future of our country.

Mr Speaker, Sir, I would like to continue my speech in Malay please.

(In Malay): [For vernacular speech, please refer to Appendix A *.] The strength of a country does not solely depend on wealth from natural resources

such as oil, timber, oil palm, sand or granite but, more importantly, the human capital. In Singapore, since the PAP Government started the policy of a clean and honest bureaucracy, many of us have become complacent because we have been living in a society that is transparent and free of corruption.

We have received many accolades and this causes the envy of other countries. The issue is whether we want to wipe out all these simply because of comments that senior Government officers have been overpaid. Secondly, what is the amount referred to as being overpaid?

I can depict it clearly when I was small, living in a society controlled by money, not merit. With money, laws could be changed such that low-cost houses allocated to the homeless were eventually owned by those already possessing a house and lands which were to be apportioned to farmers were eventually owned by landlords. Small shops had to make payouts to the gangsters who were protected by corrupt policemen and the government officers.

You may have heard stories of some countries where there were incidents of changing personal data found on the identity cards or passports, requests made to the police to closely guard their homes and court decisions which could be fixed through bribery.

Do we want to live in such a society? Who is actually more oppressed? Not the rich and famous, but ordinary citizens and the low income group, small businessmen and retirees.

(In Mandarin): [For vernacular speech, please refer to Appendix A *.] Mr Speaker, Sir, in Singapore, our Ministers pursue their work with pride and professionalism. They treasure their work

and win the respect of others. Also, look at our nurses, they are proud of their work. During the SARS period, they expressed passion for their work and were willing to sacrifice for our society. Why is that so? I do believe that this has to do with good leadership. The senior leadership has communicated the concept of commitment, quality and outstanding virtue, honesty and incorruptibility. I remember when I was young, sometimes I could not pay my school fees just because the policeman had come to my house and he would always have some reasons to take away the last few dollars that I had. Sometimes, it was because the dog in our house did not have a licence or that the bicycle in our house did not conform to the specifications. How terrible!

My next point is: what is the amount of salary that is considered enough? Last year, the salary of the CEO of DBS Bank was $7.5 million. The CEO of CapitaLand was paid $5.1 million and the CEO of StarHub, $3.5 million. This is a widely known fact. In comparison, our Ministers were only drawing $1.2 million which was very much lower. Of course, some people said the risks faced by the Ministers cannot be compared with the risks faced by the CEOs in the private sector. Let me quote a letter published in the Straits Times dated 28th March 2007. It was mentioned in the letter that the politicians in other countries enter politics as a scarecrow, but they leave the political arena as fat cows. In contrast, the Ministers in Singapore enter Parliament with black hair and leave Parliament with a full head of white hair. Our Ministers and civil servants spend endless hours, not knowing night or day, to analyse every piece of data to arrive at a decision. The risk they face is exceptionally high because their decision would affect the lives of four million people and perhaps it would even affect the survival of the little red dot. Furthermore, surrounding the little

red dot are many big brothers looking ferociously at Singapore. Under such circumstances, to make the correct decision is exceptionally difficult. But, without a single word of complaint, they proceed to do the job. For this reason, we must reward our leaders what they deserve. The purpose is really to recognise their important contributions to our country and not so much of preventing them from leaving for greener pastures in the private sector or in other countries. I believe that our Ministers have noble ideals when they enter the political arena.

Next, I move on to our civil servants. Like other paid employees, they receive a salary to support their families. I believe that we must pay market rate salaries to civil servants with outstanding performance. And we should only give to those who deserve it. Those with outstanding performance should receive market-based salaries. But for those whose performance does not reach a certain level, they should have their salaries reduced or even dismissed. This is what they do in the private sector.

*Cols. 539-540. *Cols.539-540. *Cols.541-546.

Let me give an example. After the collapse of Nicoll Highway, many friends in the construction industry had expected the Government to introduce more measures to strengthen safety at construction sites. But some changes are not necessary. In the proposed amendment to the Building Control Act, there is a new provision. It states that for all high-rise buildings above 30 storeys, there should be a new category of geotechnical engineers to design and check the piling. Is this necessary? What is the relationship between the Nicoll Highway collapse and foundation of high-rise buildings? All along, the foundation of high-rise buildings has been designed by professional civil engineers and only

when they consider it necessary would they engage a geotechnical engineer to assist. With this new amendment, whether there is a need or not, the developer must employ a geotechnical engineer. It is not only a waste of money but also a waste of precious time. What is more, time is money.

Should the civil servant who introduced this amendment receive a salary increment? In this regard, I therefore recommend that we should have a system for salary increment which is linked to performance, and this system should be similar to the KPIs used by the private sector. However, please do not use the profit bottomline as a KPI, because I do not wish to see the Government departments becoming a profit centre and forget that their main role is to provide service to the people.

The civil service in Singapore is recognised as one of high efficiency and honesty. Transparency International, an organisation based in Berlin, has ranked Singapore fifth, as the country with the least corruption. We must work hard to protect our position, not for the honour but for the need to maintain an efficient economy. In a corrupt system, there are many resources which are wasted. We do not have to look far for examples. I remember a report in recent years, which pointed out that a neighbouring country has lost US$2 billion in two years due to corruption. This is not a small sum. If these resources, which were taken away by corrupt officials, had been well utilised, they could be used to strengthen infrastructure and raise the quality of public service. Furthermore, if a country is corrupt, its problems would get more and more deeply entangled and they would never recover. On the other hand, an honest system would attract investors to our country, because it is a stable and safe platform to allow them to inject their resources and these will reap tremendous economic benefits. According to IMF,

there is an article which states that corruption is equivalent to imposing huge tax burdens on foreign investors.

Next, I would like to tell you a story. In a particular city, there are many schools, some are elite schools, and some are ordinary schools while some are not as good as the others. Among them, there are two famous elite schools. And they were set up 40 years ago. Recently, these two elite schools have changed their board of directors, and they are able to do so because they are independent secondary schools. Let me talk about the first school. It is called Bee Wah Secondary School. The directors feel that since Bee Wah is already one of the top schools in Singapore, there is no need to look for the best principal and the best teachers to come to the school. Furthermore, if the teachers join the school, they should be committed and should sacrifice themselves in education. They should be the engineers of the human souls. Not only that, the board of directors decided that the salaries of the principal and teachers should be linked to the results of the lowest bottom 20% of the students. If they get more than 50 marks, the teachers would be paid $2,500 per month, ie, $50 for each mark. So if the students get 30 marks, the salary should be $1,500; if they get zero, their teachers should not be paid. Think about that. What would be the results? When Bee Wah Secondary School wants to recruit teachers, would they get good teachers to respond to them? Not only would they not get good teachers, even the existing teachers would spend all the resources to look after the weakest students. All the good students would go to other schools, because they had been neglected. So this resulted in the loss of talent and eventually Bee Wah Secondary School may have to close its doors.

On the other hand, the board of directors of Rui Lian Secondary School

was very far-sighted. They said, "Although we are already one of the top schools in the city, there are many schools which are competing with us. We must ensure that we maintain our strength and stay on the leading edge. How do we maintain our leading edge?" The board of directors said, "We will look for the best principal and the best teachers to join our team.” Let us consider this point. Do you think it is easier for this school to recruit teachers? Certainly. Not only that, a lot of the good students from other schools would transfer to Rui Lian Secondary School. And, possibly, Rui Lian Secondary School may even have to enlarge its premises through land reclamation!

My question is, if you are thinking about a school for your children, which school would you send your children to? I think your answer would be the same as mine. Finally, let me quote a saying from Confucius: "If a person does not have long-term concerns, he would have short-term worries."

Sir, I support the motion.

*Cols. 547-552.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.15 pm.

Sitting accordingly suspended

at 3.55 pm until 4.15 pm.

Sitting resumed at 4.15 pm

Debate resumed.

(In Mandarin): [For vernacular speech, please refer to Appendix A *.] Mr Speaker, Sir, after we have heard the story of Ah Lian

and Ah Hua, let me share a story of a small town. In 1988, Minister Mentor Lee Kuan Yew went for a visit to Australia. At that time, I was a reporter in his delegation. During a dinner, he said that whenever he flew back from Australia to Singapore, he had two feelings in his heart. The first feeling was that although Singapore was faced with many problems, we were still successful. That was his satisfaction. The second feeling was that, if he was to come back to Australia and New Zealand 100 years later, he could be sure that Australia would still have a lot of cattle and a lot of people living comfortably on this land. But he could not be sure that this man-made land of Singapore would continue to exist in 100 years.

At that time, many people could not understand MM Lee's sentiments. And they asked me, "If MM Lee feels a sense of satisfaction, why did he express such a pessimistic view?" I was in my 30s and hence did not understand much and thought it was a statement of pessimism. So I replied, "Perhaps, it was because he cares for his country, and was concerned about the problems of the country above his personal problems." But looking back, I would call that political ideal "great wisdom". Such an enlightened leader with great wisdom is difficult to come by in 100 years or even 1,000 years.

In 1993, Lianhe Zaobao published the book "李光耀四十年政论选" - 40 years of speeches by Lee Kuan Yew. And I was involved in the editorial and publication process. In an interview with MM Lee, I asked him, "Looking back, what was your greatest satisfaction?" He said he could see Singapore doing well, operating well, everyone had their opportunity, and that gave him the greatest sense of satisfaction. I was in the early 40s and I could understand his sentiments and many

people began to say, "Will Singapore continue to have a leader like MM Lee, with such great wisdom to create a new world for Singapore?"

In my years as a journalist, I had the chance to accompany Ministers on their overseas visits. After becoming an MP, I also have the opportunity to accompany Ministers on official overseas trips. Therefore, I have realised the importance of having great wisdom in a small country. Many leaders of other countries highly respect Singapore although we are a small country. But when compared to them, we are as big as them, because of our great wisdom. In the face of globalisation, when we have great wisdom, even a small country will become a big country. Without wisdom, a big country will become a small country. So I would like to ask everybody whether they think that such great wisdom is invaluable. Do you think it can be measured by market salaries?

Mr Speaker, Sir, our country is small and we may seem to have nothing. But, in reality, we have everything. If we have no water, we will buy water. If they do not sell to us, we produce NEWater. If there is no sand, we will buy sand, and if they do not sell to us, we will release the sand reserves. So that is our strength. Our second generation leaders have this ability to look ahead. That is also what we meant by great wisdom.

But, yet, the salaries that our leaders are drawing are not ranked among the top 100. It is less than $5 million, which is lower than the salary of the CEO of SingTel, and also lower than the salaries of the CEO of financial banks. Is this reasonable? The crux of the matter is that the people do not object to the revision in Ministerial salaries. But what they ask is why do Ministers still need more salary when they have $1 million? And we cannot blame them for this confusion. As you know, when you talk about money, it

is always an emotive issue. The emotions will be affected because when you talk about money, much emotion will be aroused. But we understand that the citizens, through the media and discussions in the papers, would definitely pay attention to this matter. And so all of a sudden everyone is talking about money.

However, I do believe that if we pay attention and discuss it wisely, everyone will understand. And so I said to them: "The CEO of SingTel was probably still a student when MM was then Prime Minister. But now, he is drawing a salary of $5 million. Are you satisfied with this?" They said they are happy as long as they have auto roaming for the mobile phones. But did we consider what is it that made it possible for them to fly all over the world and roam everywhere? And the Singapore passport is something that we are so proud of. So all these policies are brought about by our Ministers, and if we were to raise their salaries slightly from $1 million, would they have any objections? Having said that, they understand where I am coming from and they are clear about my point.

So the people do understand that good quality is worth every cent. If you want a D24 durian, of course, you pay more. For lower quality durians, you pay less. And that applies to talents as well. But if we tell them that the benchmark of the Ministers' salaries is taken from six professions, and eight top-earners, they would definitely be confused. They are not able to comprehend what it is all about. So, in our debate, we should not be merely talking about money, instead we must raise the level of our discussion. We should raise the level of discussion to a rational one.

In the last few days of sittings, we have talked about rationality. So it is a rational debate. But some people believe, including the Chairman of the Worker's

Party, Ms Sylvia Lim, that all this debate is a waste of time. But through this debate, many citizens are clearer of how much the MPs, Ministers and CEOs are getting, so there is no big deal.

The views on this matter may vary but, overall, the debate has brought about consensus that there should be transparency. Ministers should not feel guilty about getting high salaries. If they have the substance, they deserve to be paid well. But I want to point out that, in this debate, we have heard the view that we use high salary to promote honesty. In fact, we have risen from a third-world country to a first-world country. So our high salary policy is not just to promote honesty. With talent being scarce nowadays, they are mobile and can move anywhere, thus our high salaries are to attract more talent, and not to promote honesty. And the whole world recognises that such people deserve high salaries. Furthermore, all governments and large corporations are searching for talents globally. As the saying goes, it is easy to have a big army, but difficult to find a good general. And if you have a good general, you cannot be sure he will stay.

A good example would be the CEO of Sentosa Corporation. I remember that when we visited Sentosa last year, the CEO shared with us his big plans for Sentosa, and he informed us that the number of tourists visiting Sentosa has increased tremendously. But shortly after, it was reported in the papers that he has been poached by a rival company in the Middle East. This is a good example where our talent has gone to another country.

Mr Speaker, Sir, not only must we look at it rationally, we must raise our level of discussion to a rational level so that we can see a new world. Just like what MM has envisaged, how can Singapore create and establish a new

world? So where is our new world? I think it is throughout the global market. In fact, we are living in a new era. And so we must have a global vision. At the same time, we must not forget to look back because only then we realise that we do not have anything to fall back on, and so we must depend on ourselves.

Earlier on, Mr Low Thia Khiang wanted to compare Singapore with Switzerland and other countries, but every country has its own problems. So how do we compare? Every household will have its own set of problems and likewise for the country. So it is difficult to compare. We need to maintain a balance between different forces, and we must reconcile certain inconsistencies and analysis. At the same time, we must establish foreign relations with many countries. And whilst being influential, we have to project and safeguard the interest of our country. This requires great political wisdom and not just plain wit.

In this debate, we must let more Singaporeans understand our vision of a new world, and that is the whole world. Our talents are all over the world. And the challenge for us is to attract these talents, until our third generation leaders have developed the third generation wisdom. So, on the question of salary revision for Ministers, the people’s concern is not how much the salary increment is, but rather they are concerned whether the Ministers are people-oriented and can look after the people. In fact, it is everybody’s dream that we have a good place to live and work in. And, now, our expectations are further raised. Besides having a good place to live in, we want to be able to travel the world.

As what Mr Ong Ah Heng said yesterday, he hopes that the Ministers will not forget the people after the salary revision. Also, he said that the Ministers

will remember us. In fact, many low-income workers have said that they are okay with the salary increment, but please make sure that their medical fees will not go up and that the prices of things will not keep going up. So I think they share the same sentiments.

Sir, in the 2000 debate, I supported this motion but I also reminded the Ministers that we should look after the welfare of the workers in our society. Without these workers, we cannot achieve what we have today. Therefore, I would like to urge that the Ministers will look after all the people, and the whole population will appreciate the sacrifices the Ministers have made for them.

With the consent of Mr Speaker and the general assent of Members present, Question put and agreed to.

Resolved,

That the proceedings on the item under discussion be exempted from the provisions of Standing Order No. 48(8) in respect of the Prime Minister's speech. - [Mr Mah Bow Tan].

Debate resumed.

4.30 pm

Mr Speaker, Sir, we are debating, today, a critical issue. We have discussed this for more than 20 years, each time we have adjusted public sector salaries. The last time we did it was in 2000, and now we have decided to adjust salaries again.

There has been no change in the policy. We have had this benchmark

formula for 10 years; in fact, for more than 10 years, since 1994. It has worked. It has enabled us to induct Singaporeans of ability and integrity into the system. We have built a strong team in Government.

But now we are making a large adjustment - large, in terms of the quantum. There has been a change of Prime Minister since 2000. There have been two general elections since 2000, a new team of MPs in the House, and a younger generation of Singaporeans has come of age. So it is good that this important issue is fully debated in this House on this occasion.

Politically, this is a most difficult decision for me to take. Logically, it is quite clear what I have to do, but it is something which is very difficult to get people to understand, first of all, and then, emotionally, to accept that this is necessary. And, yet, this is an absolutely critical issue. If we do not tackle it now, the problem is not going to go away. It is just going to get worse, and we will eventually end up in serious trouble.

Sir, we have discussed this at length over several months in Cabinet. The Senior Minister and Minister Mentor particularly strongly encouraged me to do it. They have been Prime Ministers. They know the importance of having good Ministers to help them with their work. But after all the discussion and debate, and after all the views have been expressed, finally, it is my responsibility as Prime Minister to make the call.

I have decided to move now, because of the overriding importance of keeping our salaries competitive in the public sector - civil service as well as political appointment holders. To make it quite clear why I am doing this and also to give me the moral standing to defend this policy with Singaporeans, I will hold my own salary at the present level for five

years. The Government will pay me my full salary because that is the way the system will have to work. But for five years, whatever the increase in the salary above its present level, I will donate to suitable good causes.

I do not expect other Ministers to follow me. This is a Cabinet decision, but I am the one who is carrying the ultimate responsibility, and not them individually. We encourage all Singaporeans to donate to good causes. What individual Ministers want to do is up to them. What individual MPs want to do is also up to them. I know that the Ministers and the MPs already support various worthy causes, but it should not be a public ostentatious display of how generous and self-sacrificing they are, but a private matter for them to decide at their own discretion.

Mr Speaker, may I now speak in Mandarin before coming back and make the main arguments in English.

(In Mandarin): [For vernacular speech, please refer to Appendix A *.] Mr Speaker, Sir, these few days we have been debating on the issue of adjusting the Ministers' pay. This is a very difficult political issue at hand, because it is not easy for us to convince the people to accept this change. Furthermore, it is also difficult for them to understand and emotionally accept it, and accept it with a willing heart. That is a very difficult task. Why is it so? This is because a lot of people have intuitively felt that the Ministers’ salaries are already very high. Just like what Mr Low Thia Khiang has said, it is an astronomical figure. And to further increase it is not reasonable. A grassroots leader asked Minister Lim Boon Heng frankly: "If $1.2 million a year is not enough, then how much is enough?"

Although it is difficult to convince the people, we have no choice but to pay attention to this important issue. Because

our salary policy is to ensure that Singapore has a good Government, continue to have honest and capable leaders and this is a key strategy. As the Prime Minister, and after weighing the circumstances, I have decided to take action immediately, to adjust the Ministers' and civil servants' salaries. If we were to wait for one or two more years, we will definitely lose one or two more cohorts of talent, and that will weaken the leadership team, as well as the competency of the Government. At the same time, it is necessary for us to make the people understand. My considerations are for the future of our nation, and not for my own salary. Therefore, I have decided to donate my salary increment for the next five years to charity.

An honest and capable government is a unique feature in Singapore politics. It is also a key strength of Singapore. Our Government has strong capabilities, high efficiency, honest and upright, and free from corruption. But, most importantly, the Government values the interests of the people above everything else. Our children have good schools, our workers have good jobs and everyone has a good home. This is not by chance or something that falls from the sky. They are results achieved through the hard work of every Singaporean. But it is also because of a good Government who exercises able leadership, and cares for its people.

What we have achieved is obvious to all, there is no need to say more, and many countries have sent their personnel to observe and study from us. China is one of them. Every year, hundreds of officials from China visit Singapore on study trips. I think we are among one of the top countries in the world where the Chinese officials come on most study

trips. The Chinese academics analyse our system carefully, and they have published various reports and articles. They are greatly impressed by us in three areas: firstly, the Singapore Government has a continuous self-renewal and improvement system; secondly, they want to know how Singapore stays clean and efficient; and, thirdly, as China today is talking about building a harmonious society, they feel that Singapore is indeed a harmonious society, because the gap between the rich and poor is not too wide, the poor are looked after, there is social security and there are plenty of upgrading opportunities. Hence, they feel that Singapore is a useful model and is worthy of study in these few areas.

The day before yesterday, MP Josephine Teo mentioned about Professor Lu Yuan Li from Shenzhen University. He had spent some time in Singapore, and stayed at the East Asian Institute, National University of Singapore. He conducted a comprehensive study on the governing system of Singapore. He is now writing a book and the title is "The Singapore’s System". He asked two key questions. Firstly, how does a party in power for a long time preserve its vigour in the long term? Secondly, how does a party in power for a long time preserve its honesty? These are basic questions we should ask ourselves. As Members, you must think about it, and Singaporeans also must think about it carefully. One of the answers is that Singapore places great emphasis on attracting talented people to join the civil service and the political leadership. This is not an academic Professor living in an ivory tower. In fact, many Chinese leaders and the central government of China have realised that Singapore is unique in this aspect, so the Chinese press has published many positive articles on this. Recently, Beijing’s newspaper《新京报》The Beijing News published a commentary. Let me share with Members what the author said:

"The people responsible for policy missteps will eventually leave, but the agony brought about by these missteps has to be borne by society. Singapore attracts talents into the Government through a series of measures. These people form the backbone of the Government, and carefully formulate policies, under the watchful eye of the public and public opinion. This results in very low hidden costs, which could transfer from the Government to the people, because of missteps in the policy-making process, and significantly reduces the opportunity costs of policy decisions."

As this is a very important sentence, I shall read it again, so that we can understand the meaning. "Because we have an open and transparent system, the government is under the watchful eye of the public and public opinion."

So the Government has no choice but to pay attention to the peoples’ thinking, the peoples’ sentiments, and we have no choice but to do well in the job. Because we have good people to form the backbone of the Government, we can make prudent decisions, so that in our policy-making process it will significantly reduce opportunity costs. Should the Government make a wrong decision, the people will suffer. But making the wrong decision will not necessarily mean that civil servants will suffer, and the hidden cost will be transferred to the people. Hence, it means that even though the Government is wrong, it is the people who will have to bear the serious consequences. This is called the hidden costs because you cannot see it. Of course, such circumstances are rare. And it also reduces the opportunity cost of policy-making. If we do a good job, we can achieve 7% economic growth and 3% if it is not so good. If we have a drop in 4% of economic growth a year, our total GDP is $200 billion, and 4% of our GDP is $8 billion. This is a considerable figure. This is the study of a Chinese analyst, and he understands this unique aspect of Singapore.

*Cols. 553-562.

We have already reached such standards. But how are we going to pass it from generation to generation, to continue to attract capable policy-makers and to keep a good Government? In my opinion, the most important thing will be to continue to attract high calibre talents. The ideal future leaders must have both ability and political integrity. It is vital to have competency but, more importantly, to have public spirit. They must do their utmost for the country and to improve the lives of Singaporeans. If we have such leaders, then we can win the trust of our people and achieve exceptional results. Only then, MP Seng Han Thong's feedback can be solved satisfactorily. The Government's salaries have to keep pace with the market rate and only then can we can attract the right people to form our leadership team and strengthen the new Cabinet. In the past 10 years, we have managed to do so.

Today's Cabinet is different from the one in 2001 after the General Election, which is also after the 911 attacks, as we have a different Cabinet now. Compared to 2004, after I have taken over as Prime Minister, we have also replaced the members of the Cabinet. This is only in a span of five years, or two years ago. And within such a short span of time, we have already renewed our Cabinet. This goes to show that our policy is effective, and through this policy we are able to attract talents as well as to maintain our standards. I hope that in the next five years, we would continue to strengthen the Cabinet and draw in new blood.

In ancient China, the imperial examination was a system for people to move up in ranks. And parents at that time hoped that their sons - the girls were not given the opportunities - could do well in the examinations and become government officials. And if the top scholar "状 元" (zhuang yuan) is lucky enough, he might even marry the emperor's daughter. This tradition had

gone on for thousands of years, and was a tested path to wealth. In today's China, it has inherited the better side of the system and thus maintains high quality leadership at the senior levels of government. Their Ministers, Central Government, Party Secretaries, Governors and Mayors, are generally very capable and resolute. They can be better than us in lobbying for projects, leadership, reforms and bringing forth new ideas, etc. In fact, some are much better than us. And it is for this reason that China is successful in reforming and opening up in the past few years. Without these leaders, China will not advance by leaps and bounds.

However, the Chinese government also faces difficulties in attracting new talent in recent years. Now, the Chinese economy is soaring but the young people have no interest in going into politics, because that is no longer the best route to success and wealth. In the past, when the officials "下海" (xia hai), it was considered a big thing as the risks were very high, Xia hai means to leave politics to go into business. But now the young ones, as a headstart, are already swimming in the sea, starting their own businesses, or working for foreign companies, MNCs, etc. And it is common for many to switch job from government to private sector, because there are a lot of opportunities in the private sector and the pay is many times more. Very often, it is not just a few times more, but 10 to 20 times more.

In Singapore, we need talented people in both the Government and private sector. So we aim for a good balance of talent in both the Government and private sector. We subject all candidates for leadership positions to stringent requirements. In ancient China, many people entered the government for fame. In China, to win promotion and get rich has been a major preoccupation for many

generations. But we do not want this to happen in Singapore, and we do not want people who are looking for promotion and wealth. We want people who genuinely want to contribute to the country. So, the existing salary policy is a key strategy for us to attract talent. But this is only part of our overall strategy. We will test and assess the candidates to ensure that they have the necessary capabilities and integrity. Finally, Singaporeans will have to decide. And the political leaders eventually will be tested by the people. Every five years, Singaporeans will have a chance to judge the performance of the leaders through casting their votes, and decide who they want to lead the nation.

Several MPs raised concerns about the lower-income groups. And they have linked together the Ministers' salaries with the problems faced by the lower-income group. They compare the salary increments of Ministers with the amount spent on social assistance schemes. They thus feel that the Government has neglected the needs of the poor. When people make such comparisons, it can easily become an emotional issue. And I do understand why some have intentionally made it emotive. I understand these sentiments. Because when you look at a poor person, an elderly or a handicapped person not having enough to eat or no place to stay, it is natural that you feel bad for them. Besides sympathy, we will also need to think. The long term goal of the salary revision is to attract talents so as to make the country prosper, and create wealth for our country so that we can improve the lives of all Singaporeans, including the lower-income families. In this way, we can reduce the number of poor families and improve their lives.

It is easy for us to talk irresponsibly about giving generous welfare - that is the easy way out and definitely the popular thing to do. It is just like the God of Fortune giving away money, and everyone will be pleased. For that, we do

not need outstanding leaders to do it. The question is: what is the long-term consequence? Because this is a short cut as well as a short-sighted view. It is not financially sustainable, and we cannot solve all their problems entirely. Therefore, a more rational solution, I believe, is to develop our economy with all our strength.

With good economic growth, we can use the resources to implement policies and schemes to help the poor and the less fortunate. In Singapore, we have quite a lot of such programmes, ie, advisory committees, development assistance councils, charity organisations, voluntary welfare organisations, etc, and various assistance schemes. For those who really need help, the support is made available. In Singapore, most low-income families own 3-room flats, and how much is it worth? Depending on the district, a flat in Ang Mo Kio is worth about $190,000. As for the city area, it could cost over $200,000. After paying off the mortgage, how much will the families have? We have made a calculation, and figures show that the net value for a low-income family is about $150,000. So, it is not true to say that low-income families do not get attention from the Government. And I think it is not right to say so, and dishonest to say so.

Some people cannot afford a 3-room flat, so they stay in a 1- or 2-room flat, and about 8% of our people stay in 1- or 2-room flats. Even 1- and 2-room flats enjoy upgrading programmes, such as lift upgrading and these are free because they are rental flats. So much so that, when they cannot find storage place in the event of an upgrading, it becomes a problem for the Government. Although the Government looks after the people in all possible ways, there is also a limit to it.

Even for the poorest families, their children have a chance to receive good

education. Every neighbourhood school is a good school. If their results are good, they can go to a reputable secondary school and the best junior college or polytechnic. They will then have the opportunity to break away from the poverty cycle and bring about a better life for their families. Is this a natural fact? Is this something that falls from the sky? Or have we achieved this together through the people’s hard work and leadership of the Government? Why are we able to do this? This is because we have a good mechanism. It is because our Ministries are efficient. Because our civil servants understand that this is not only a job, this is a calling.

So, the leadership, whether it is the Ministers or the civil servants, they care for the less unfortunate in the society. And they try their best to help the poor upgrade their skills so as to stay relevant. How best to help the poor and those in peril? We have done a lot and will continue to do so. But it has to be in moderation, and this is not easy. If the help is little, the poor families will not get enough assistance. If we help too much, they become too dependent, and this brings about laziness, and aggravates the problem.

Our MPs and grassroots leaders are constantly working hard to help the poor especially those with difficulties coping with a livelihood. The Ministers, Deputy Prime Ministers and Prime Minister, also work hard to help the residents in our constituencies. Our grassroots leaders also help us to understand our residents and their problems, and actively help solve their problems. Just go and take a look at one of the meet-the-people sessions, and you will know that Singapore is different from other countries. Not only the PAP is working hard, I know that Mr Low Thia Khiang and Mr Chiam See Tong have put in a lot of efforts in their constituencies. So for many years, they have continued to hold

their standing. Do you see that in other countries? Not necessarily. If you go and ask the grassroots leaders what is the biggest problem faced in helping the poor people, I think many experienced grassroots leaders will tell you that the biggest problem is not the lack of money. Rather, it is to find enough people to volunteer to help the needy as well as to encourage the poor people to be self-reliant, and upgrade themselves. This is the most difficult aspect. So money is not the crux. The question is: which is the best channel to help them? So I would like to urge all Singaporeans and all Members to think about this problem calmly and carefully. Only then can we truly find out the best way to help Singaporeans.

If I had wanted to avoid this unpleasant debate brought about by the salary revision, I could have waited for a few more years or after I have retired, then it is somebody else's problem. And I do believe the Ministers will not mind, and Singaporeans will not be upset. No one would come after me and question me why I am not revising the Ministers' salaries. This is an easy thing to do. But this is not a responsible way. Our problems will get more serious and, eventually, our system would be undermined. I know that this move will bring about a debate, in fact, a controversial one. But I have still decided to proceed. It is my duty to do what is right, and I have the duty to explain why I am doing it, and to safeguard the long-term interests of Singaporeans.

Singaporeans have always trusted the PAP because it is an honest and reliable Government. And they know that the Government truly wants to change the lives of Singaporeans and it has always given out good report cards. So I think now, we can all apply for "瑞莲学校" - Sylvia Lim Secondary. Therefore, I would like to urge the people to support this

policy so that we can continue to attract talent for the future generation, it can continue to ensure the prosperity of Singapore, and Singaporeans will have the reason to continue trusting the Government.

(In English): Mr Speaker, Sir, let us start by asking the right questions. What is this about? It is not just about the salaries of Ministers or MPs or civil servants. It is about our future. How can Singapore produce the best government to secure a bright future for ourselves and our children? Ask yourself four questions. What kind of government do we want? What kind of people do we need to run such a government? How can we sustain this system for the long term? And then only ask yourself the last question: how should we pay those people serving in Government as Ministers or as civil servants?

But, first of all, let us ask what kind of government we want. We can look at other models around the world. One model is the Swiss model, and I will call it "invisible" government. Invisible because the government is low profile, the canton takes charge, 30-odd cantons, highly decentralised system, the country runs itself. Mr Low Thia Khiang himself said that the Swiss has no President or Prime Minister. In fact, they have a President, but he takes turns every year: one year, one term, next year, next President. He also runs the Cabinet. It is just pro forma. I bet you that Mr Low does not know who the present President is. Neither do I. That is "invisible" government. A model for Singapore?

Another model might be the Japanese model, say, in the 1980s before the bubble burst. I would call it "auto pilot" government - strong civil service, rotating Ministers, civil service highly competent, maintaining the policies, managing the policies, basically maintaining the status quo. Ministers,

politicians are advised by civil servants - any time, the civil servant tells you, you better listen to him because he has spent 30 years there, whereas you are likely to be there maybe for 18 months. It works very well, maintaining stability in a calm environment. But when the weather changes, you must dive and manoeuvre. You have a problem because the civil servants cannot do that. You need Ministers to come out and do that. And if you do not, you are in turbulence. This is what happened to Japan in the 1990s after the bubble burst. They could not change policy.

The third example, I would cite, is New Zealand, but there are many countries like that, and I will call it "routine" government - a government which works just as a matter of course, and salaries are lower than in the private sector. Some good people come in from time to time. But they are not trying to assemble the best possible team all the time, either in the civil service or in the political leadership. So, once in a while, you have a strong leader, like Helen Clark now in New Zealand or John Howard in Australia, and they dominate and they span several terms, 10 years maybe, or longer. Then the kaleidoscope changes, leaders come, leaders go. It works. But it does not aspire to be at the peak all of the time.

I am not saying that these are bad systems for these countries. They work for these countries in their circumstances. But Singapore's situation is totally different. We are a tiny, multi-racial, multi-religious, one little red dot out of so many little dots in the middle of South East Asia, lack land, lack air space, lack sea space, lack water, and, sometimes, also run short of sand and granite, operating in a fast-changing competitive global environment against very powerful competitors. So, in this situation, what is our model? Our model is "paranoid" government - a

Government which worries all the time, which plays a crucial role in this system. It is proactive and looks ahead over the horizon. Whenever people tell you not to worry, you start getting concerned. You listen to people and businesses, you respond to their needs. You produce imaginative sound policies to transform Singapore. You are totally committed to improving the lives of all Singaporeans. That is our system. But it is not just words, it is not just rules, it is not just Instruction Manuals, or IMs, it is how the people inside work the system. It means that you must have a strong effective government - small, lean, efficient - but gathering the best possible team to provide the country with the best possible national leadership.

Some people think that now that we look like a First World city, we have arrived, good things will happen to us automatically, and do not need to make a special effort. Why do you need a high quality Government? Mr Low Thia Khiang made this argument. He cited Finland, Denmark, Switzerland. But others think so too. So I will cite one letter which was published in the Straits Times' Forum page, and he said exactly this: "It is not that citizens do not appreciate the fact that Singapore ticks but all First World cities tick - hygienic eating places and clean running water are commonly available in all First World cities." So we are a First World city, we will have clean water, we will have safe food, no problem. They should ask themselves: are we in that happy position? How does Singapore become a First World city? Were we born like this? How will Singapore remain such a city? Supposing the PAP does not painstakingly build up the present and the future teams of MPs and Ministers, will one magically emerge like Brigadier Generals in Mr Lim Biow Chuan's example? Because yesterday he said, in the US Army if 50 BGs are put in an aeroplane, and they disappear over the Atlantic Ocean, another 50 will emerge. If

the 90 people in Parliament today disappeared into the South China Sea, will another 90 people emerge?

Will Singapore survive, much less prosper, without a capable team in charge? How did we get here? With strong political leadership and effective government. It did not happen automatically or by chance. It will not happen automatically. It only happens through a deliberate and systematic process to build the team, to build in talent at all levels. Civil service - scholarships, career development, recruitment in-service and from outside, Singaporeans and some from overseas. MPs - nation-wide search and exhaustive tea sessions. Ministers - systematic head hunting of talent, with the right character, right leadership attributes and team building, so that there are not so many prima donnas. If I have David Beckham and Marilyn Madonna, I may become busier rather than more successful. We did not start out like this. The first generation - Minister Mentor Lee Kuan Yew, Goh Keng Swee, Toh Chin Chye, Rajaratnam, Othman Wok - they were thrown up by revolutionary times. But after the revolution passed and we went into peace and tranquility, they found that left to itself or left to chance, party politics in Singapore is not going to produce a new leadership equal to the task at hand. If we had not done anything, the PAP would have been like Mr Chiam See Tong's Singapore People's Party - same leadership, same cadres, same ideas, of the past, not of the future.

Therefore, Minister Mentor and others went out systematically building a successor team. That is why we are all here today. And this approach has worked. We have had a second generation of leaders, one transition; a third generation of leaders, a second

transition. And it is a system of government which delivers results. NEWater - to turn a strategic vulnerability into a competitive advantage. Education - excellent schools for all, outstanding post-secondary institutions. You look at our ITEs. ITE East looks like a university; 7,000 study there. When the Middle East folks saw ours, they wanted to build the same. Our architects are now in the Middle East building four ITEs for them. We will help them. Clean, non-corrupt government and many other things that we take for granted in Singapore, which are unimaginable in most parts of the world.

Other countries are very keen to learn from our success. You look at the cooperation projects we have in China, India, Russia, and the Middle East. I tell our people, be careful, we only have one civil service. We can only run one country well. So do not over stretch yourself. Do not think that we can make mini-Singapore all over the world. But people are very interested to learn from us. They want to know how our system works, how our Government works, how they can do the same, how we can help them to get there. And every visitor who comes to Singapore from Asia or Africa and even from Europe, Eastern Europe, they ask me, "How do you do this?" Recently, I met President Museveni from Uganda and the first thing he asked me was, "Can Singapore do an industrial park in Uganda?" It is a great compliment to us.

This quality of the Government is one of our most critical assets, most sustainable competitive advantages, built up over many years, very hard for other countries to replicate. It is what Mr Lim Swee Say calls "da ruan jian ", ie, big software. You can replicate computer systems, a department here and there, maybe a service bureau. But for the whole government to work like this, it has to be either all there or it is not

there. And so we had better zealously uphold and improve upon it.

To maintain this quality of Government, we need a first-class team - officials, MPs, Ministers. This job has become a lot more complex. In the old days, they called it "government"; now they call it "governance". It sounds a bit more erudite but, basically, it means it has become more complicated. In the early days, the Prime Minister could rely on a few key Ministers. So Minister Mentor Lee had Dr Goh Keng Swee, Mr Hon Sui Sen, Mr S Rajaratnam, Mr Lim Kim San and, wherever there was a problem, he would send a key Minister to go there to fix the problem. Dr Goh Keng Swee was in the Finance, and when we needed to build up a Defence Ministry, he went to MINDEF. After a while, he went back to Finance because the Ministry of Finance needed to be sorted out some more; then he went to Education when he was needed there. One man, multiple Ministries, but one after the other because, after all, it was just one man.

But, today, the responsibilities of all of the Ministries have grown. And if we still operated the Ministries of Defence, Finance or Education the way we did back in the 1960s and 1970s when Dr Goh was running them, we would be antediluvian - out of this world, left behind. So I need good Ministers in the Ministries of Finance, Defence and Education at the same time. But not just in these three places, but also the Ministry of Foreign Affairs; Ministry of the Environment and Water Resources to deal with water; MICA to deal with the new media; and the other Ministries too. So we need a strong and comprehensive team in the Cabinet. Every Minister has got to be on top of his job.

We have outstanding civil servants. I am proud of them. Some of the MPs have suggested maybe our civil servants

do not work hard enough, not assessed rigorously enough, maybe they should be publicly chastised and we should see when you punish them. But I say these are good guys, by and large, and, as a team, there are very few like that in the world. We are proud of them. But that does not mean that, because we have good civil servants, we do not need good Ministers. In fact, if we have good civil servants and we have weak Ministers, the civil servants cannot work and the system will freeze up and we will be in auto-pilot mode. Because, if you want to change GST, if you want to do Workfare, if you want to transform the whole education system or Medisave, these are not bureaucratic fine-tunings by civil servants who write papers. These are political decisions by Ministers who say, "Yes, I want to do this. It is a big thing, it is difficult, but I am going to decide. If the Cabinet agrees, we will sell it to the people. With the civil servants in this framework, now let us see how we can best achieve this."

So the Ministers have to both lead as well as manage. Mr Siew Kum Hong yesterday said Ministers should lead, not manage. I say they have to do both. If we have Ministers who only make political speeches but do not know what is happening in their Ministries, we will be in big trouble. The Minister has to be on top of his Ministry. He is not just presiding as a non-Executive Chairman. He is at least the full-time Chairman, sometimes the CEO, and he sets the tone, makes the big decisions and directs the Permanent Secretary, Deputy Secretary and the Directors, and makes things happen. On top of that, we expect him to go out and deal with his constituents, to hug babies from time to time, and to come here and charm MPs from time to time. It is all part of the job. Those are the Ministers whom we are looking for. Therefore, we need Ministers who have learned this job for years, not just people who rotate in and out of Government.

I discussed this last year with an American professor. Not just any professor, but the Dean of the Kennedy School of Government at Harvard, David Ellwood. He was visiting Singapore for the first time and was amazed at what he saw. He said politicians all over the world tend to focus narrowly on short-term issues. But, here, how is it we are forward-looking, tackling longer-term challenges? What is it which makes Singapore different that we can do this? And he recounted his own experience. He is an academic, studies poverty in America, and spent his whole career on the subject. Then, the Clinton Administration came in, he went into the government to try and achieve something, and became an Assistant Secretary. But after two-and-a-half years, the kaleidoscope turned, and he was out. He pushed for welfare reform. But you cannot reform a welfare system in two-and-a-half years. You may need 20 years. He asked, "So how is it in Singapore you can do that?" I said, "It is our system, our people. It is because we care, but it is also because we know that if we screw up for the long-term, in five or 10 years' time, there is a high chance that a lot of us are still going to be here to pick up the mess, and we do not want to make a mess for ourselves, and therefore we serve Singapore well."

So we are looking for Ministers like that. It is not just competence. We are looking for Ministers who must be committed and dedicated to Singapore, are trusted and supported by the people, and determined to improve the people's lives. To do that, they must have a sense of duty and responsibility to build this nation. They must have a desire to serve and to give back to society, a conviction that Singapore is worth fighting for and, finally, the confidence that, if they join the Government, they can do something worthwhile. You are not writing on water

and then the river flows on and you have wasted your time. You are building in stone and concrete for long after you have retired, as Mr Tan Gee Paw said. He is not a Minister, but the same ethos pervades the system.

And these remain the overriding requirements when we look for people in political office. What is their mission? It is not just maximising the value of our business, but making Singapore something special: a home for all our people, a land of opportunity, an inclusive society, a bright future for our children. Dr Goh Keng Swee said it best. He made a valedictory speech in 1984. He was still Minister. This was his last major speech before he retired. I think it was not published because some parts were sensitive - still are - but the Establishment was there, heard him and has not forgotten. I will read just one passage:

"To the New Guards soon joining us, may I say this: Welcome to you. Some of you will discover before long that you have joined a Holy Order that expects total commitment from you. That will be your moment of truth. You will then regard the present condition of the Republic not as a pinnacle of achievement but as a base from which to scale new heights."

I was one of those who entered politics in 1984. I was there. Mr Wong Kan Seng, Dr Lee Boon Yang, Mr Mah Bow Tan, Mr Speaker, Mr Yeo Cheow Tong and Mrs Yu-Foo Yee Shoon are still Members of this House. I think many of us were there. We will remember the occasion and the words.

So how do you keep this going? You have got to build the strongest possible team in the Cabinet, in the Government, to govern the country, serve Singaporeans now and well into the future. How do you sustain it? Keep the good people coming. We have a team in place, but we have to look ahead. You look at the

people who are coming up today - public service leaders, such as Ravi Menon. He was in the news recently. He was Deputy Secretary in the Ministry of Finance, about-to-be Second Permanent Secretary, MTI. He started 20 years ago in MAS, did not make the cut for the PSC Scholarships. Rumour has it that he failed the IQ test. One of the brightest souls but, fortunately, there are second chances in Singapore. He did well in MAS. I spotted him, persuaded him to go to MOF. It is a new field but he took the challenge. He did well, was given broader responsibilities. So, this year, he is going to be 2PS, MTI. It took 20 years to develop such a person.

The Ministers are an equally long process. Senior Minister Goh Chok Tong entered politics in 1976. He spent 14 years before becoming PM in 1990. I joined politics in 1984 and took over as PM after 20 years in 2004. I was the longest-serving Deputy Prime Minister in the world. Happily so. Therefore, it is not too early now to start looking for the next PM. Building the next team and leadership of the team is my most important task. At every election in the last few terms, we have brought in new Ministers and MOSs, people with potential, or Backbenchers and became Ministers. In 1997, we had Mr Lim Swee Say and Assoc. Prof. Yaacob Ibrahim. In 2001, we had Dr Ng Eng Hen, Mr Tharman Shanmugaratnam, Mr Khaw Boon Wan, Dr Vivian Balakrishnan, Dr Balaji Sadasivan and Mr Raymond Lim. That was a bumper year. In 2006, last year, I had RAdm Lui Tuck Yew, Ms Grace Fu and Mr Lee Yi Shyan as MOSs, and Mr Masagos and Mr Teo Ser Luck as Parliamentary Secretaries. And we have promoted, from the Backbenchers, Mr Gan Kim Yong, Mr S Iswaran, Mr Zainul Abidin and Mrs Lim Hwee Hua.

So we have a strong team in place because of what we have been doing. Now, we must plan for the

succession. Take the Minister for Law, Prof Jayakumar, for example. He is 67 years old. By 2011, he would be 72. I must have a successor ready by then. I have been discussing this with Prof Jayakumar. In fact, he has been discussing this with me. He is anxious that I find a successor because, he says, by 2008, ie, next year, he would have been the Minister for Law for 20 years. I will have to find a successor, either from the present MPs or maybe a lawyer in the university, AG's Chambers or in private practice. Where do I find him or her?

Take the next PM. Mr Lim Swee Say said yesterday, "I do not know who the next PM will be." Other countries sometimes have instant PMs or Presidents. I do not know who the next US President will be. But I do not worry and the US is not worried either. I mean I am concerned but I am not alarmed. But, in Singapore, do you want an instant PM? I can have instant trees - just plant and water - tree-planting day. But a PM? It happens in other countries. In Britain, the Labour Party has been in power. This is their 10th year. So if the Conservatives win the next election, David Cameron and his team will have hardly anybody amongst them who has ever been in government and they will be in charge from day one.

One journalist, very astute, asked me, "Dalai Lama zao dao le ma?" Have you found the Dalai Lama? But I am not looking for one Dalai Lama, one anointed leader. I must find and bring in the whole team of MPs and political office-holders. Then amongst themselves, eventually, some of them will become Ministers, some will become DPMs and they will settle, and one will emerge, and will become the next PM. I am already 55 years old this year. I just drew my CPF. MM retired at 67. SM retired at 63. Singapore should not have a 70-year-old Prime Minister. So what sort of people are we looking for for this

succession? We are looking for people in their early or late 30s, young enough to be young still in 10-15 years' time, and somebody to come out from that group. And I want to be able to assemble together the best possible group of such young 30s and 40s, so that we can offer Singaporeans the best choice. Then, 10 years from now, one of them, at least, will be ready to take over as PM. Last election, I had brought in quite a number of under 30s, the P65s. But I need to reinforce the team further. Next time, I need the P70s and then the P75s. And then, I will have a more rounded team.

So the question is: how should our system work so that we can find the best top team for Singapore? Will it make it easier to find this team and will we get a better outcome by making it harder for people to come in and making salaries low so that you will not come in unless you are prepared to take a large pay cut. How does that help Singaporeans have a better choice?

Let me tell you the PAP's experience in recruiting talent. We are looking for able and committed people. They are moving up their careers. Some of them are at the peak of their professions. Some of them have careers, but they have decided that they will spend time doing community work. Mr Lim Biow Chuan is one of them. Ellen Lee was another. Others have become almost full-time volunteers or have become full-time volunteers, unpaid workers, like Denise Phua.

The key criterion for us is not how successful their careers have been or how much they earn, but whether they have shown that they care, not just for themselves, but for others beyond their immediate families. And that is a question I ask their referees when I write letters to the referees to give me their views. Have they shown, in any way, that they care

for others and have done something for others?

For office-holders, we are looking for people who can run a Ministry, make things happen, take a higher view and persuade people to follow them. I can tell you that we have turned down people who are very successful in their professions and, in fact, who are visibly keen to be fielded. Because we did not feel comfortable, we were not quite sure what their motivations were. On the other side, we have searched out people doing good work in the grassroots who can contribute on a wider stage. And that is why we have this line-up of 24 new candidates in the last General Election. And that is why Parliament today has a changed composition - sounds different, feels different. Sometimes, for the older Members, they say, "Wow, the world has moved on. How do I continue to make a contribution in this debate?"

We value people to whom an income is irrelevant and who will do what they feel they want to do regardless of the pay. When we find them, we will field them if they are suitable. But I cannot design the system on the assumption that everyone is like that because not everyone is like that. It is very hard to persuade a good person to take the plunge. In China, "xia hai" means go into the private sector. I think in Singapore, this is "deng shan ", climbing the mountain to enter the Government - they think very carefully.

They have to disrupt their lives, enter the hurly-burly of politics with all these uncertainties - so many demands and new responsibilities, public exposure and constant scrutiny, loss of privacy. Ministers are like a fish in a goldfish bowl, MPs too, in fact. Quite a number of candidates asked me before they came in, "If I become an MP, can I still wear shorts and go to the hawker centre for my Sunday breakfast?" I said,

"Yes, go ahead. I do it once in a while. If people wave at you, you wave back at them. If they do not wave at you, you better get scared." But loss of privacy is a real problem. And risk of failure, not just a loss to themselves, but also the risk to Singapore, the shame, obligation and the burden of the knowledge that you may have let Singapore down. Because not everybody succeeds and not everybody does equally well. And even if you do okay, others may do better and there will be comparisons made.

You take the 2001 batch. We had seven musketeers or samurais, three doctors - Balaji, Vivian and Ng Eng Hen. They are still with us. They have all served well but they have taken different routes. Ng Eng Hen has become Minister; Vivian was acting Minister and subsequently became Minister. When I promoted Ng Eng Hen and Vivian, I spoke to Balaji. I said, "You have done good. Your Ministers are satisfied with you but I am not ready to promote you to be Minister yet. I do not think you are ready but I am promoting Ng Eng Hen and Vivian, and I have to tell you, to be fair to you. So if you feel that you want to decide that this is not for you and you want to go back, do something else, or go back to neurosurgery, this is the time you have to think about it." Balaji said to me, "I am staying. I am a neurosurgeon. I calculate all possible consequences, good and bad, before I operate. I have come in. I have decided. I have stopped practising."

At first, we encouraged the doctors to half-practise so that they keep their hand in just in case, but Balaji and, in fact, the other two all decided that it is not fair to the patients. They are no longer au fait operating everyday, not current with the latest developments. If they make an operation, even assisting somebody else, something goes wrong, it is on their conscience. Balaji told me "I have come in, this is my future and this is what I am

going to do. If you find me useful as an MOS, I will be happy to serve." So I said, "Good for you. I think the more of you." That is the sort of people we are looking for. But it is not easy to find people who are like that.

Before the last General Election, I spent a long time talking to many people, specifically talent - spotted and head-hunted key potential candidates, some office-holders, others who could make particular contributions. I did not just depend on the tea sessions that whoever came in for tea and they percolate up and eventually we are left with whatever comes up. We looked at their profile and we went out to talent spot. The people who saw me, nobody accepted on the spot. In fact, if anybody had accepted on the spot, I would straightaway have made a mental mark and probably would have wondered, "Should I proceed?" Because it would have shown that he did not understand what a big thing it was that I was asking him.

But, fortunately, after they had time to think it over and discussed it with their family members, and several more chats with me, a good number agreed to come in for various reasons. One said, "I am a sucker for a challenge". One said, "Yes, I want to do it. My family agrees. I can come in." Another one said, "Well, I really am not keen because I do not think I am good enough. But if you tell me that you cannot find somebody more suitable and you think that I am up to the mark, I am prepared to go on your word."

I did not discuss pay with them. But I know that amongst those who came in, from the private sector, people like Grace Fu, Teo Ser Luck, Masagos, most took pay cuts. Ditto for those promoted from the backbenchers like Gan Kim Yong or Iswaran. They knew this too because they know what the scales are. But despite this, they agreed to come in. If the gap between the Ministers and the

private sector is wider and widening, will it make it easier or harder for me to assemble a new team? Will Singapore have a better or poorer choice of leaders? Will we and our children be better or worse off in 10 or 20 years' time?

It is not just Ministers, we also need quality MPs. Therefore, we need a proper MP's allowance. We considered this very carefully back in 1994 when we first went on this benchmarking. Should we benchmark MPs to a token amount or a substantial allowance? We hesitated to set a substantial allowance for fear of people pursuing the job for the allowance. The concern is not on the PAP side because we put our candidates through a whole series of tests and chances are, if somebody is like that, we will catch him early; and if we do not catch him early, we will throw him out soon. But how about the Opposition candidates? Do they have the same Quality Control?

In the last General Election, the NSP team in Pasir Ris GRC said that if they were elected, they would provide free healthcare and contribute one-third of the MP's allowance to a community fund. They could only do this because we had revised the MP's allowance up. Fortunately, the voters were not taken in, so I have Teo Chee Hean who is here today as well as Michael Palmer and several others. Eventually, we decided that we will have a substantial allowance to reflect the quality of the people we want. Backbench MPs who do their jobs conscientiously make major sacrifices of their time and career and this is so whether the MPs are working in large firms or running their own businesses and practices. I say this frankly, the MPs will not want to say it of themselves, but they all know that it is true. Your top boss may say, "Marvellous! This is national

service. It adds to the lustre of the firm." Your direct boss or the one above him will say, "You make up your mind. Do you want to be a lawyer or do you want to be an MP?" And if you have no bosses and you are your own employer, your clients will ask, "Will you have time for my problems?"

So the MPs who have come in as backbenchers have a very tough time. And the MP's allowance is not going to make good the sacrifices but it is going to be an important gesture to recognise the effort that they have put in. And so, when we revised the rest of the salaries this time, we not only revised the MP's allowance but re-pegged it to restore the relativity which was there in 1994. And I am quite sure that Mr Low Thia Khiang and Mr Chiam See Tong have also experienced this, not abstractly, but themselves, because without this proper MP's allowance, I think it would have been very difficult for them to continue as practically full-time MPs for nearly 20 years.

Therefore, this way, we built up a high quality Parliament. This Parliament may be small. It is only 84 plus 9 plus one, which is 94. But it compares well with Parliaments in any developed countries - US, UK or Australia - anytime. We are not as eloquent as the British in the House of Commons. We may not be as rude as the Australians in Canberra Parliament, or maybe we are just more tongue-tied. In Canberra, Paul Keating, who was Prime Minister, would call the Opposition - I looked this up, by the way - "sleazebag, harlot, piece of criminal garbage, animals on the other side". I apologise for the unparliamentary language. In that, we cannot compare. But in the quality of the debate, in the preparation which goes into the speeches, in the thinking, we compare with any of them. Man for man, if you meet them, I think our people measure up, and that has shown itself even in this debate, this time, on this subject.

But to keep it like this, we have to pay people properly. Otherwise, we are not going to get good people; and if we do not have good people, the standard of government will go down over time. And if we have a bad team, it is very difficult to build back with good men, because good men and women will not want to work for a bad boss, and will not want to belong to a dud organisation. They want to go where the excitement, the challenge and the quality is. So we are here, we cannot go down and come back. We go down, and we go down further.

Just now, I mentioned the Dean of the Kennedy School. Now I read to Members an email from a friend of mine. This is the former Dean of the same Kennedy School, Graham Allison, whom I have known for 25 years. He was the Dean and he is now a Professor there. They make a study of governments. That is their profession. I will read you his email. He was in Korea.

"On Friday, I picked up the Straits Times, and on the front page saw the story about your comments about Ministers and civil servants' salaries falling behind the benchmarks in the private sector. The notion that the Minister making $1.2 million might be underpaid will strike most Americans as incredible. But I would say right on."

He is not just doing a rah rah. He explains:

"Singapore's demonstrated interest in "first-class governance" is a fascinating topic for study. In any other realm of life, we believe that there is a connection between financial rewards and the ability to recruit and sustain a first-class workforce. Yours is one of the few governments in the world that practises that bit of common sense. Good for you."

"In any other realm of life, we believe that there is a connection between financial rewards and the ability to recruit and sustain a first-class workforce." This

is not just an uneducated view. This is the view of somebody who headed the School of Government in Harvard.

This system of paying people properly has worked. We are not arguing the merits of this pay increase in the abstract, just in principle, in an ideal world or in theory. But with the benefit of the experience of the last 20 years operating the system, adjusting it and moving step by step.

Look at the last 10-15 years since 1994. We have maintained an inflow of talent in the civil service, not just the Administrative Officers but also the other services - the uniformed services, teachers. The quality of the service has gone up because we have had the inflow. We have been able to turn over the under-performers. We have brought good people in, and it is no longer so easy now for the private sector to poach from the Government.

One private sector media executive, who was in the Government, says, "You must say this because we used to be able to poach people from the Government any time. Now we can't poach AOs any more."

We have cleaned out. The under-performers have gone. And it has made an enormous difference to the quality of the service.

I know some MPs want us to do public lynching - this person, for the following shortcomings, hang, drawn and quartered. Ministers even better! If I did that, would I have civil servants and Ministers? Do you do that in your companies? It is always with finesse and politeness - resign, given notice amicably. So, just because you do not see us exercising discipline visibly and ostentatiously does not mean that we are not managing the system tightly and properly.

For the Ministers, we have brought in people in each election. Money corrupts, says Prof. Thio. Power corrupts, yes. But in this system, have we had wrong people come into Government and corrupt the system? Where? Instead, because of this, we have got the Government clean, efficient, capable. So, when we had the Asian financial crisis and SARS, team Singapore rose to the challenge. When faced with competitive challenges from China and India, the team comes up with new policies to keep Singapore competitive - the Biopolis, the IRs, create new jobs, replace old jobs lost, Workfare, ComCare.

Could we have done all these? Would we have had the instruments, the team and the capability to do these had we not moved boldly in 1994, and again moved in 2000? If we had hesitated on 11th September 2001, then we would be 30% behind where we are now, and I think we would have already lost many people. We will be in deep trouble today.

Without proper pay, the integrity of the system will also be at risk. High pay does not guarantee a clean system. Enron is an example. Some MPs have mentioned. I concede that. But, nevertheless, proper pay enables us to keep the system clean.

Look at so many countries fighting corruption all over the world, all over Asia, all over South East Asia. Members will say that these are backward countries. We are now First World. Even in the developed countries, in the UK - Tory government, Labour government - they have problems of sleaze. What does "sleaze" mean? "Sleaze" means Ministers giving advantages, Ministers receiving benefits, Ministers staying in hotels, Ministers arranging for things to go through. This is Britain, not a 42-year-old country.

In the United States, the Republicans lost the mid-term elections. Iraq was an issue but so was sleaze, because their Congressmen and Senators were found doing bad things with money and the voters punished them. But that does not clean up the system.

In Asia, China is fighting a wave of corruption, not just ordinary corruption but top-level corruption - government officials, Party leaders. The Party Secretary of Shanghai, Chen Liangyu, Politburo member, removed. Mayors, Vice Mayors, some of them executed. They can execute one corrupt person. Can they eradicate the practice of corruption? So the problem continues.

In South East Asia. Yesterday, Mr Lim Swee Say told Members one story. I will tell Members another. I met a prominent South East Asian businessman very recently. I told him that corruption is a problem. He said, "Yes, money politics. The government says they will eradicate it, but it cannot be eradicated. It's permanent." Why? Many reasons. But one factor - and a major factor - is that the public sector salaries are way below the market.

We have got to keep our system clean at all costs. "At all costs" means, if anybody does wrong, however high up it goes, it will be investigated. And if there is any allegation, however high up that allegation goes, it will also be investigated. We have done it with Ministers. I have been investigated because of Hotel Properties Limited (HPL). Younger ones may not remember, but it was 10 years ago. We had a long debate in this House. So has the Minister Mentor. Nobody is above the law.

What will happen if people are not properly paid? Well, it will start with small things. Eventually, it will get worse, and then we will be just like the others. I can tell Members some stories about that,

but I will have to save that for another time.

Our whole system works like this. It is a culture which is well established. Everybody knows the rules. Everybody knows that if he touches something which is wrong, he will be found out. Anyway, he should feel bad about himself.

Therefore, because we have this system, we can deal with big issues, big things, properly. Take the IR. For the two tenders, billions of dollars were at stake. One was $5 billion and the other was $4 billion.

What is remarkable about them? It is not that they came, but how we handled them. Usually, for big projects, because so much money is at stake and it is so easy to corrupt people, we do a tender on price. They have to seal their bid and put it into the box. Witnesses open the box. It is quite objective - highest price wins.

I wanted to do that for the IR, because it is such a big project, and a big subjective element in assessing the project. And if we decided to go on beauty parade, then there will be arguments - choose the best one, were you really fair and so on. So I stayed very firm to the line that I want the project to be tendered, and we designed a tender scheme to make it work. Unfortunately, it could not work. So I visited Las Vegas. I went to four of the casinos, talked to their CEOs. They all raised this with me. They said, "This won't work. You won't get the best project." So I asked, "What should we do?" The reply, "Fix the price and compete on quality." I said, "How do I assess the quality? It is subjective." They said, "You have to do that. Otherwise, you will not get a good project."

Some very clever people said, "We know what you are trying to do. You want to design a tender to make us do the right thing." Says a Chief Executive, "I am a mathematician too. I know how these tenders work. So if you set these rules, I will play your game. But I think you are setting the wrong rules and you are making us play the wrong game."

So when I came back, we changed the policy and we decided on a beauty parade. It is not Miss Universe. We have to have a whole system assessing the project objectively on many criteria. Some we can measure, some we have to judge, some it is subjective feel. And, at the end of the process, we must have the integrity of the system and the quality of the judgment, so that Singaporeans know that we have done the right thing. The participants agree that we have done the right thing, and nobody suspects or alleges any hanky panky. So we did that. And, at the end of it, through proper procedures and due diligence, the Evaluation Committee picked the two best projects for Singapore. Who else can do that in the world?

Merrill Lynch wrote us up and I quote:

"Singapore's process was transparent, supported by the community and attracted the world's largest and best IR companies. The government's decision was accepted and respected by all parties, and people believe the two winners were the best bidders."

Think about that. What kind of civil service, what kind of Ministers do we need to make that happen? Prof. Jayakumar was on the Committee; Mr Lim Hng Kiang, Mr Raymond Lim, Dr Vivian Balakrishnan, Mr Mah Bow Tan, supported by Permanent Secretaries, Singapore Tourism Board and Sentosa Development Corporation. System discipline, no leaks, no bribes, no monkey business. Therefore, we get the best

projects for Singapore. How much would it have cost to just adjust half a point here, half a mark there, and you come up with a different outcome? How much in that kind of a society would participants have found ways to encourage people to come to such outcomes? But, in Singapore, they knew what the game was and we got the best outcome for Singapore. I think that is worth quite a lot.

So competitive salaries is one of the basic requirements to protect the integrity of our institutions. Many MPs have raised the other side of this - the question of moral authority. They have made this argument that public service requires selflessness and sacrifice, that Ministers especially must have moral authority to lead, not just to manage. Therefore, you cannot expect wages comparable to the private sector. That is the gist of the points made by many MPs like Dr Thio Li-ann, Ms Sylvia Lim, Mr Lim Biow Chuan, Ms Denise Phua, Miss Eunice Olsen and others. I agree with these propositions in principle. You must be selfless, you must have some sacrifice, you must have the moral authority to lead, to get people to follow you and, therefore, it cannot be exactly the same as the private sector. So I will differ slightly from Shanmugam. Shanmugam says, "Why should there be any sacrifice?" I say, "Let there be a sacrifice so there is no doubt that the person in this is not making money and not in this to make money.

But let us ask: where does moral authority come from? I think it comes from leaders who care for the people, who improve the lives of the people, who are motivated to serve others and not enrich themselves, and from leaders demonstrating that they are more often right than they are wrong. You need a bit of financial sacrifice. Some, but this is not an auction. You sacrifice "X", I

sacrifice "2X", you match me, and the one who makes the biggest self-sacrifice will get the job. You look at the countries which have low-paid Ministers. Do they have higher standing with their people because of that? I know that Ms Denise Phua, Mr Lim Biow Chuan and others disagree with this. And I know that many of those who have spoken up for the opposite view hold their views out of deep conviction. For example, Mr Lim Biow Chuan, according to Dr Lee Boon Yang who has known him for many years, has held this view ever since Dr Lee has known him. He supports the PAP on everything else but on this one, he thinks we should not do it. I respect those views, but I cannot agree with that. In particular, I would disagree with Ms Denise Phua when she talks about the nexus of power and money. I am not worried about somebody wanting to become PM for the sake of $4 million. I am worried about somebody wanting to become PM and hoping to collect $400 million – pay is zero, but collect $400 million under the table. That is what we fear.

We do not expect Ministers to earn as much as top-earners in the private sector but it must not be too far out of line from what a person of similar ability can earn outside, otherwise it becomes not workable. That is the principle on which the benchmark is based. First, estimate what the successful corporate executive or professional can earn, then you apply a discount, then you work out a formula that is fair and stick to that formula - whether the things go up or down, follow that formula. When the private sector moves, we also adjust. That is what we call 2/3M48.

There are some people who want to benchmark Ministers against their previous professions. For example, they say engineers are paid, I think, $600,000 and there are so many engineers in Cabinet, so that is what you should be

paid. Ms Lee Bee Wah was quite alarmed. She raised it just now to point out that quite a number of engineers are no longer in that list because they have moved out to become Chief Executives and other things. And I am saying this again here by special request of the Ministry of Education and MTI because they are very worried that people may take that engineers column literally and the students will stop studying engineering and go and do law. So I think Ms Lee Bee Wah did us a favour, explaining that engineers have done very well and lots of bright students ought to go and study engineering.

Or veterinary surgeons. There was one letter in the Straits Times which says Dr Lee Boon Yang is a vet, so you should pay him a vet salary. Dr Lee Boon Yang is not just a vet. He was a vet. He was spotted by Mr Goh Chok Tong, who invited him to tea and assessed that he was not just a vet, and fielded him. From Parliamentary Secretary, Senior Parliamentary Secretary, Minister of State, Minister - he proved himself at each step. He is steady, has judgement, can size up people, can get good people to work for him and get things done. So such a person can do many things, whatever his original training, and I should say, in case Members do not know, that quite a lot of very talented people became vets in the 1960s and 1970s. Colombo Plan scholarships were offered for veterinary science. At that time, pig farms were a significant part of our economy and we needed vets to look after them. So if you look at the vets who have done well in the public sector, it is not just Dr Lee Boon Yang. Cheng Tong Fatt, who became Permanent Secretary (National Development) and he became an Ambassador to China; Chin Siat Yoon, currently Ambassador to China; Ngiam Tong Tau, the brother of Ngiam Tong Dow, CEO of the AVA (Agri-Food and Veterinary Authority) for many years. Three very able people - all three of

whom separately were awarded the Meritorious Service Medal. So if you can find me some more vets like them, please tell me. I will invite them to tea.

There have been many suggestions from Members to improve the benchmark. Mr Teo Chee Hean dealt with most of them yesterday. You can argue about the technicalities and refine them, and we will consider the refinements and improve the benchmark incrementally. For example, Ms Denise Phua suggested having a range around the benchmark rather than at a single point. I think, in the private sector, they call them compa-ratios. You have a benchmark and you then plus or minus maybe 20% or so. We do not have that exactly but, effectively, we do that. For example, we often appoint Acting Ministers - the substantive grade is Senior Minister of State. So he is not receiving the MR4 benchmark. He is receiving one below that, SR5 Permanent Secretary's salary. If he is confirmed, he goes to MR4 and there is also room for Ministers to be promoted to MR3 and MR2. So Ministers have this range above and below the benchmark but whatever the fine print, the benchmark is basically sound.

Mr Teo Chee Hean has also explained why the $2.2 million figure which the benchmark has produced this year is reasonable. I leave the technical verification to PSD and the Minister-in-charge, but I apply a reality check. First reality check - $2.2 million ranks 206 amongst private sector earners. Are the 206 jobs in the private sector more important than being a Minister and being a Senior Permanent Secretary? I think, presently, there are only four Permanent Secretaries who are in the MR4 grade and above and the Ministers. 206 jobs in the private sector bigger than those? 50 maybe, 100 possibly; 200, I do not believe so. My second reality check - what are the CEOs of the companies earning? Business Times published a

table on Monday, listing the companies in the Straits Times Industrial Index. I do not think they have data for all of them but they have data for most of them. So they published a list of the CEOs and how much they were earning. I have taken that and made a table which I would like the Clerk now to distribute. [Copies of Table distributed to hon. Members.]

This is what you see in the Business Times, but I have also added a column for market capitalisation. Just for a sense of size. 55 companies. The top-earner was Venture Corp - Mr Wong Ngit Liong earning $16.75 million plus, followed by Wee Cho Yaw, $9 million, all the way down to a company called "People's Food", earning quarter million dollars. The middle number of these 55 would be probably between 27 and 28 - Comfort Delgro and Genting International - for $1.75 million. So $1.75 million for two companies with market capitalisation of $4 billion to $5 billion. My Ministers are earning $2.2 million. I think we passed the sanity check.

But I would also ask you to look at the market capitalisation column because it is interesting. What are the biggest companies? The banks - $30 billion plus. SingTel is the biggest, $50 billion. And I would ask you this question. If Singapore Inc were a listed company, what would its market capitalisation be? Think about it. My GDP, which is the profit earned in a year by Singapore Inc, is $210 billion. The price earning ratio on the SGX average is now 20. If I calculated a market capitalisation, if Singapore Inc went for IPO, this is a $4 trillion company. So I think that we are well within the right ballpark for what these jobs are worth as Ministers. But whatever the formula, whatever the detailed number, the reality which you cannot run away from is that the private

sector is moving, it is moving up, and so must we.

Several MPs suggested that we delegate our responsibility for setting pay to an independent pay commission. There is a conflict of interest, we cannot settle our own pay, let somebody else do it. But I do not believe this will settle the matter because whatever the commission recommends, finally, the responsibility comes back to the political leadership. The buck stops here. If he recommends high, are you going to take it? If he recommends low, are you going to solve your problem? Who will answer for the outcome? So, finally, the responsibility lies with the political leadership. The Cabinet is accountable to Parliament, it is accountable to all Singaporeans. Every five years, Singaporeans have to judge and decide whether we have done the right thing, whether we have delivered on our promises, whether they have got value for money. And, in fact, at every election, Mr Low Thia Khiang and Mr Chiam See Tong have made this an issue. Starting from the very first election in 1984 which I contested, when Mr Chiam See Tong made a very powerful speech at the Fullerton Square and said, "One month salary for the Minister, one year's work for the worker and you still don't have." So that, finally, is the test. Are we doing the right thing? The people have to decide whether we have kept the trust with the voters.

The Opposition and some other MPs too disagree with this Government's approach and have suggested various other ways of doing it. Ms Sylvia Lim made a pitch just now to say this is unrealistic, only 0.1% of people in that top category. Why not look at the median wage, which is US$2,000 or S$3,000? But will that approach do better at producing a team for Singapore and producing a successor leadership, a new PM, DPM and Cabinet for Singapore?

Just as a thought experiment, I would ask Mr Low Thia Khiang and Ms Sylvia Lim to produce their line-up of Ministers, their dream team. Name it. They do not have to be Workers' Party members. You can take and choose any Singaporean, including PAP Members. If you cannot find a complete line-up for the Cabinet, at least tell us who will you appoint as Minister for Finance, who will you appoint for Minister for Law, from the best people out there in the private sector. Tell us and tell Singaporeans how much you intend to pay them. The median wage? 100 times the 20th percentile? How much do you want to pay them? Is it realistic to have such a dream team if you do not pay them properly? Then Singapore can decide.

I am not saying that we have the best possible team, that this team is perfect. I readily concede that we need to reinforce it. I readily concede that the ability and the skills of the Ministers vary. Each is different, some are stronger than others, some have skills which complement one another. But every Minister is worth his pay. Those who make the grade stay, others who do not leave. And by paying properly, we can improve, we can strengthen the team over time. We can compare with other countries. But, unfortunately, the comparison was done wrongly by Mr Low and some others. Because if you compare with other countries, you will find that other countries also face the problems of paying their political leaders properly. It is not true that low pay works better for them. The reality is they cannot master the political consensus to pay more realistic salaries because the politicians are in low standing, the public will not support it. In some countries, the politicians rank below used car salesmen in public trust. You say you want to pay yourself, what have you done to justify this?

But benchmarking to the private sector is not something special to Singapore. The other countries tried it too, although they had not been able to do it. The Americans tried it, the British tried it, did not work. Yesterday, Mr Shanmugam delivered an outstanding speech in the House, not all the Members were here. One part of the speech which the newspapers did not report was what he said about what happened in America in the Judiciary which is, according to the American Chief Justice Roberts, a constitutional crisis. And he went on to the details, but I think it is an important subject.

Let me explain again what happened to America. America established a market-based framework in 1989 to adjust government salaries annually, based on increases in private sector wages. So every time the private sector went up, the government went up, benchmarking to the private sector. They made one adjustment. They were supposed to follow through every year. Congress never followed through for fear of a public backlash. So now, the whole system is stuck because all the salaries are related - the Congressmen, Secretaries of the Departments, civil servants, Judges - all their salaries are inter-related and if they do not move on, the Congressmen, everybody is stuck. So the Judges are particularly without recourse because nobody speaks for the Judges. And that is how they have ended with a constitutional crisis. And I would quote a passage from Chief Justice Roberts' annual report last year. The whole of his annual report was devoted to this one subject of judicial salary. I will just quote one paragraph:

"The dramatic erosion of judicial compensation will inevitably result in a decline in the quality of persons willing to accept a lifetime appointment as a federal judge. Our judiciary will not properly serve its constitutional role if it is restricted to (1) persons so wealthy that they

can afford to be indifferent to the level of judicial compensation, or (2) people for whom the judicial salary represents a pay increase. Do not get me wrong - there are very good judges in both of those categories. But a judiciary drawn more and more from only those categories would not be the sort of judiciary on which we have historically depended to protect the rule of law in this country."

So the Americans have a very, very serious problem. So, too, the British. They also have a policy. Top end of senior civil service pay, they call it the "SCS", senior civil service. So we have at least 80% of the private sector median for broadly comparable jobs, and the Ministers are linked to the senior civil service. So comparable jobs, private sector, median 80%, we are looking for comparable jobs, private sector, median 2/3. So, in fact, their formula is more generous than our formula but they have not been able to do it. The latest report by the independent salaries review body - they have a salaries review body - said, "Since 2002, we made clear that the government was failing to fund the senior civil service pay system in such a way as to meet its own targets. The government acknowledges that it is proving more difficult to recruit high quality candidates from the private and wider public sectors."

So you can be a 5,000-year-old country like China, 1,000-year-old country like Britain, a 250-year-old country like America, or a 42-year-old country like Singapore. Human nature takes a long time to change.

What do they do? They cannot raise salaries, but find other ways around the problem - short term in office, then make up earnings through lectures, connections. Bill Clinton's earnings, you have heard Mrs Josephine Teo yesterday, as an ex-President, $40 million in lecture fees, that

is not bad; $12 million in book advance, never mind the royalties per book. And the wife also can write a book, she also has $8 million book advance. Somebody said to me, "But that is all right. That is private sector. It is good for him."

If you are in a job and you are calculating how do you look after yourself day after tomorrow, after your retirement, what does that do to your motivation, your commitment, your sense of responsibility in the public sector, in the job? But if you do not do that, how do you take care of your family? That is the system, that is the revolving door. Do we want that?

There is another approach. You can top up salaries with additional perks. In Hong Kong, until 1997, it was a British colony, so every civil servant has a fully paid holiday for the family to the UK every year because it is meant for the expatriates, Englishmen. So even the Hong Kongers who were recruited into the service, they also get a holiday in Britain. Even the Hong Kongers whose children are Hong Kong Chinese get an allowance for their children to be educated in public schools in the UK. That is part of the terms of service. Other countries too. One ASEAN Minister told me that the system was like that and there was nothing cloak-and-dagger or underhanded about it. The system is like that. As a Minister, once a year, she and her family are entitled to one holiday, fully paid, anywhere in the world. Is that better for us?

We have decided to be open, upfront, transparent - what you see is what you get (Wysiwyg), or, in this case, what you see is what they get. No hidden perks, no post public sector benefits, which is what Ms Sylvia Lim mentioned in the Straits Times, only the pension for the office-holders which is the same as what the civil servants receive and even that has been frozen since 1994. We are going to

study how to include the pension into the benchmark comparison as well as whatever superannuation benefits which the private sector has. It is not so easy because, in the private sector, you have golden parachutes, golden handcuffs, all kinds of things, which do not show up in the annual pay. So I am not sure if I count them in, whether I am going to be behind or further ahead, but I think we should find out what the status is, so that we can understand the real comparison and position.

Besides, these salaries are not fixed. One-third of the Ministers' package is presently variable, after the revision, half is going to be variable and it depends on two things - the GDP, how well the economy is performing and his individual performance. Teo Chee Hean has explained why we have chosen GDP as the umbrella indicator to bring everything together, not just low-income family, but also middle-income, high-income, security, infrastructure, housing, health. It all comes down to GDP. Because with that, I can solve many problems. But because different Ministers have different responsibilities, I also have for each Minister a performance bonus. The Prime Minister decides how much the Minister will get, how he has performed in his portfolio. I do not want Teo Chee Hean to spend all this time worrying about the bottom 20%. What will happen to the SAF? But I do want other Ministries, like MCYS, to worry about the bottom 20%; MOM to worry about jobs; MTI to worry about generating growth, getting investments, and that goes into the performance bonus for each one of the Ministers.

There is a range, because not all the Ministers carry the same burden or have the same responsibilities. And the load will vary from year to year because the challenges and the circumstances change. If there is SARS, if there is a security issue, if there is an economic recession or an education transformation,

our focus goes there. But there is a distribution, some get more, some get less. I have a table which I will ask the Clerk to distribute which shows you the numbers and the distribution. [Copies of Table* distributed to hon. Members.]

*Cols. 533-534

PM, could you let the Leader move the exempted business motion?

Resolved,

That the proceedings on the business set down on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No. 2. - [Mr Mah Bow Tan].

Debate resumed.

So you can see that we have been stringent in our evaluation. Only two Ministers were in the highest bracket of eight to 10 months' bonus, more than a third were in 0 to 5 months' range, and the rest were in the middle, and similar numbers for the Ministers of State. The Parliamentary Secretaries are on a more stringent scheme.

I should explain that this is not over and above the benchmark. This is part of the benchmark. So when we say MR4, it is not a guaranteed amount. It depends on growth and performance, but we depend on every person giving of his best so that, as a team, we can deliver results for Singapore.

Sir, these are all the arguments which we can make and which I think are strong arguments why we should do this. But despite these arguments, I know that a lot of people still find the Ministers' salaries policy difficult to accept. And I think there are some reasons for this. The

income gap is widening, the economy is doing well, but some people and businesses are still facing difficulties. As one grassroots leader told Mr Lim Boon Heng: "Ministers' pay goes up, our pay did not go up, our business has not improved, prices of goods and services have also gone up." These are real problems on the ground which people feel and which colour their perceptions. So some people say, "In principle, I support the salary revision, but this is not a good time." I agree. RAdm Teo said, "But we must do it in good time", meaning early. But I would concede that this is not a good time now because we have just raised GST, not everything has been sorted out in the economy.

But on the other hand, firstly, there is no good time. Secondly, and more importantly, there is urgency. I considered waiting one year. This might have made the package easier to explain and might have shown more sensitivity because we have just done hard policies with the GST. But this is a problem which is very urgent. It is urgent because it has been seven years since we last adjusted. Since then, the private sector has surged ahead. You have seen the charts RAdm Teo has shown to you for the benchmarks, particularly for MR4. The Government held back after 9/11. It held back after SARS. In fact, it had not merely held back; it took pay cuts of 10% and, after SARS, another 10%. We took the pay cuts but, in the last two years, the gap has still widened, and the private sector is now rallying ahead.

If we look ahead, the whole of Asia is booming. Many Singaporeans are going after opportunities all over Asia. If Singapore does as well as we expected to do, then the opportunities and rewards in the private sector are going to be tremendous. And not just the dollars, but the excitement, thrill, the adrenalin of

going into new markets, starting new businesses, creating a new presence in first-tier Chinese cities, second-tier Chinese cities, the Middle East, India, and Central Asia. If we wait till next year or the year after, the Government will lose people, the service will say this is a government which shies away from a politically prickly decision and, meanwhile, we will lose ground further. By the time we move, even a 33% increase will not be enough.

So we cannot afford that. We have to move now. And we have to keep on adjusting as the private sector moves, because this is a dynamic situation and we have to stay abreast of it. That is why the Ministerial Statement says we are making one move on 1st April 2007, a second step on 1st January 2008 and the third step on 1st January 2009. If Asia continues to thrive, some of these adjustments are going to be large. But we have to do them. Not a fresh decision, but as a consistent policy already debated and decided upon. This policy is for the future. Mr Lim Swee Say explained it yesterday as "Old Lim Swee Say" and "New Lim Swee Say". So I told him both Lim Swee Says better make a speech in Parliament, which he did.

But let me put it my way. We are preparing for the future against the backdrop of a new globalised Asia completely transforming itself. And this policy is intended to work not for us, but for a new generation of Singaporeans. The test is not whether my present Ministers will leave because I know some MPs asked, "Who has left yet?" I think Ms Sylvia Lim asked that question too. The test is whether we have good Ministers here to face good MPs in this Chamber in 10 or 20 years' time.

We must and we will tackle the problems which people feel and which make them sour on this issue - income

gap, middle-aged workers, healthcare costs. These are important priorities for me and my team, and we have started many programmes to deal with them: Workfare to help the lower-income workers; ComCare to help the needy; improvements to Medisave, MediShield, Medifund to make healthcare more affordable; and upgrading of HDB flats to enhance the value of your property and improve your quality of life. This applies even to rental flats; it goes all the way throughout our society. We will do more to help those who are in trouble - the poor, the needy and the unemployed. How can we do so most effectively? By building a good team which will grow the economy, conceive the ideas to tackle these and future problems. And by having good people who are in touch with your needs, doing their best to make your life better, and who care for Singapore.

This is going to be a controversial and emotive issue for a long time. But I am convinced that we are doing the right thing. The cost of building the team to serve Singaporeans is tiny, compared to what they can deliver, what is at stake. What is the cost of having the wrong team in charge of Singapore? It is what the Beijing News article called "zi hui cheng ben ", ie, opportunity cost of making the wrong decision. Where would we be now, if we had not thought of NEWater many years ago? How would our children be coping if we did not have first-class schools in every HDB town and 40% of every cohort failed PSLE, which used to be the case when I was in school? What price do we put to safe streets and law enforcers whom the public can trust? Have we made the right decision? I am convinced so, but time will show and Singaporeans will decide. By the next election, we will present our report card to Singaporeans, then judge us on our performance, whether this Government has delivered on

its promises, whether you have better jobs, better lives.

Mr Speaker, Sir, on Monday, RAdm Teo quoted a piece from Richard Vietor, a Harvard Business School professor, who wrote a chapter on Singapore Inc. I think some of his passages are worth quoting. I will just read you this:

"Singapore has become a rich country. It has remained secure in Southeast Asia amid countries far larger and somewhat less stable than itself. Singapore has done this through a combination of great leadership, effective developmental strategies, and strong government institutions. It is difficult to think of another country with a similar set of government institutions that work so well ... ."

"Yet, Singapore's future remains uncertain. While it continues to grow quickly, the challenges of becoming a knowledge-based economy are immense. Singapore has done it in the past and thus serves as an admirable model of what is possible. It remains to be seen if the country can continue in the future."

It is the task of all of us to get the best team to lead Singapore, and to prove that Singapore's success can continue well into the future. [Applause.]

6.40 pm

Dr Neo. Only questions and clarifications. No speeches, please.

Mr Speaker, Sir, I would like to follow PM Lee's footstep, and I, too, am not going to take the MPs' Allowance increment and I am going to donate it back to my PA allowance cases in my constituency.

I will try to phrase my question. May I ask PM Lee whether my constituents will blame me for supporting him and could I say to my constituents that it is for their reasons that I support PM Lee's call and bold step to increase the civil servants' increment and our Ministers' increment?

The reason is that Singapore, the little red dot with no natural resources, cannot take chances. It must maintain its prosperity. If Singapore should falter due to incompetent leadership and wrong policies, it is the poor Singaporeans and the destitutes that would have the most suffering.

You are making a speech, Dr Neo.

I am finishing, Sir.

Please do.

Therefore, we must prevent it at all costs, now and for future years.

Mr Speaker, Sir, the Member has put it well. This is a message which has to be presented, not just by me or my Ministers but by all the MPs and, in fact, by all the grassroots leaders in all of the constituencies.

I know there have been grassroots leaders who say, "I support you, but give me arguments which I can use to persuade people why you are doing the right thing." And that is what I have tried to do today.

Mdm Ho, are you making a speech too?

Mr Speaker, Sir, I respect and am very touched by PM's sincere gesture to hold his salary for five years and to donate the increase to charity. But, Sir, I fear maybe this is a rub-off of the paranoidial culture of the PAP Government. I fear that, out there, there may be others who may be taking PM's magnanimous gesture as a retreat and a face-saving admission that the policy is flawed. And I think it is so important for us to emphasise and

underscore in this Chamber that what PM has done is really because he cares for Singaporeans and I hope PM will make a clear clarification here.

Mr Speaker, Sir, I have stated my position, explained my reasons, and said that I do not expect Ministers or MPs to follow my example. I have my reasons to do it which, I think, Members understand.

Pursuant to Standing Order 44(2), the motion to consider the Ministerial Statement on Civil Service Salary Revisions lapses at the conclusion of debate.

Order for Second Reading read.

6.44 pm

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the main purpose of this amendment Bill is to revise the basis of statutory compensation for acquisition of lands under the Land Acquisition Act.

Overview of land acquisition legislation

The Land Acquisition Act has played a pivotal role in the development of Singapore. It paved the way for numerous major developments in Singapore, including HDB's new towns to house the majority of our population, the Jurong Industrial Estate which provided jobs for many, key infrastructure, such as the Changi International Airport and, more recently, the various MRT projects. These projects, which brought much benefit in the public interest, were made possible because they were developed at a cost which was affordable to the State then, through the limiting compensation provisions under the Land Acquisition Act.

Singapore today has become more developed and urbanised. Land acquisitions now affect far more people than those carried out in the 1970s or 1980s. Today, many more Singaporeans own private properties. It is often that Singaporeans sink a major portion of their life savings and future earnings into their property.

Sir, we have not made major amendments to the Land Acquisition Act from the time it was enacted in 1966, except for the periodic updating of the statutory date to bring compensation value nearer to the current date of acquisition. The current approach on payment of compensation is based on the market value of the land as at one of the two dates: the date of acquisition or the statutory date (which is a date in the past), whichever is the lower. There are also restrictions in arriving at that market value. Furthermore, the market value cannot exceed a value based on the land’s existing use or the development baseline for the land, whichever is the lower.

The "whichever is lower" provisions in the Land Acquisition Act to cap the statutory compensation have been a source of contention. Over the years, we have sought to cushion the impact of this approach by periodically updating the statutory date and also through ex-gratia payments. However, after reviewing the Act, we have decided that these provisions are no longer appropriate in the current context. We are therefore amending the Act to provide for compensation at the prevailing market value.

Amendments relating to compensation

Let me now explain how the amendments relating to statutory compensation are being effected. This is provided for in clause 10.

Firstly, we will remove the alternative dates for determining the statutory compensation and move away from using a past statutory date of 1st January 1995. Instead, compensation will be based on the market value as at the date of the acquisition of the land.