HOW THEY DID IT
By Leong Ching
MINISTERS’ salaries are pegged to the 48 top earners in the private sector in six professions. These include lawyers, accountants, engineers and local manufacturers.
The method is to rank these top earners according to their pay, take the median pay and take off one-third.
This way, a minister’s salary is kept competitive against the private sector.
Defence Minister Teo Chee Hean, who is also Minister-in-charge of the civil service, said that while “there is no perfect method for doing this benchmarking”, the current method had been debated thoroughly in 1994 and had the support of the House.
Yesterday, however, opposition Members of Parliament stood up to challenge this benchmarking.
Workers’ Party’s Mr Low Thia Khiang asked the Government to consider modifying the current benchmarks to “a more equitable and sustainable one”.
“We suggest that the benchmark should take into account international practice, in particular countries such as Switzerland, Denmark and Finland,” he said, pointing out that these countries have ministers who are paid lower than Singapore.
He noted that these countries have a pay adjustment scheme, but “unlike Singapore, they all do not have a sure-win formula that ensures civil servants always have the best deal by benchmarking specifically to the top few earners”.
In the end, he argued, there must be a non-financial element to public service.
“There’s simply no point in offering high remuneration just to entice someone to serve if what he is interested in is to make more and more money for himself and his family in pursuit of material interests.
“Don’t forget that even if you don’t pay peanuts but pay with a bigger piece, say, a banana, you can still get a monkey,” he said.
Also arguing against the method of benchmarking was Potong Pasir MP Chiam See Tong.
He said: “I think this is unfair to the taxpayer who is footing the bill, because the high-performance managers, the CEOs are paid all kinds of extras, incentives, perks such as bonuses and stock options, and they also get bonus shares.
“In other words, their salaries are highly inflated. How can our ministers take that as a benchmark?”
A fairer way, he said, is to peg ministers’ salaries to those of ministers of other First World countries.
“I think Hong Kong is a good country to follow,” Mr Chiam said. “Hong Kong is an Asian country about the size of Singapore. It is paying its head of government about $600,000 a year, or about $50,000 a month. I think this is a fair salary,” he said.
People’s Action Party MP Inderjit Singh also took issue with the benchmarking approach, even though he supported the pay rise overall.
The Ang Mo Kio GRC MP said he agreed that the ministers and civil servants need to be paid what is due. But instead of a benchmark, he wanted the Prime Minister himself to decide ministers’ salaries.
MP for Marine Parade GRC Seah Kian Peng told The New Paper that he thought letting the PM have a say is an idea.
But he said benchmarking is the way to go. Once you have the principle in place, you just have to work out the details.
Mr Seah said: “It is a formula – who are in this group, how do you calculate it. If you want to argue about this, there will be no end to it. Everyone will think that they have a better way.
“If I can offer a suggestion, it is that after all the calculations are done, we still allow the Prime Minister the discretion to make the adjustments within a range, as he deems fit,” he said.