Monday, 9 April 2007

Speech on the Ministerial Statement on Civil Service Salary Revisions

OK here it is. I finished it at 3am last night, and made quite a lot of amendments in the morning and then over the course of the sitting. I ended up being the last speaker for the day. CNA has a video here.

Minister Teo and some MPs told me it was a good speech, so I guess I did OK. In all honesty, when I'm up there reading off my speech, I'm so caught up in doing it and making sure I deliver it the way I want to, that I really don't know how it's going. But it's a good feeling for your fellow MPs to tell you that you did well.

It was 7pm by the time my turn came, 7.30pm when the sitting finished. I'm too tired now to give my usual commentary, plus I've got to start writing another speech for Wednesday (on the Spam Control Bill). So here's the speech for now, and I'll post more about it another time.

9 April 2007

Mr Deputy Speaker Sir, thank you for allowing me to participate in this debate. I know that the hour is late, and I beg the indulgence of the House while I make my speech.

I will start by stating my support for the principle of paying ministers and top civil servants fairly. But I would draw a distinction between ministers and Administrative Officers. I will first discuss Administrative Officers, or AOs.

Administrative Officers

Sir, the Administrative Service is a career. It is a job for AOs, albeit one in public service and hence expected to have a greater sense of purpose and an accompanying element of self-sacrifice.

Seen from that perspective, we cannot fault AOs if they view the public service and the private sector as alternative career paths, between which they have to weigh the relative merits. It is a choice between two competing jobs, each with their own attractions, and we must be realistic and accept that remuneration plays a big part in the decision-making process.

I therefore agree with the benchmarking of Administrative Service salaries with the private sector salaries, with two caveats.

Firstly, the benchmarks should be adjusted for the fact that AOs are entitled to pensions if they serve long enough. Pensions have gone the way of the dinosaur in the private sector. It is therefore inconsistent to benchmark Administrative Service pay to private sector salaries on the one hand, and to retain a pension scheme on the other. We should either do away with pensions completely, or adjust pensionable officers’ salaries to take into account their potential pensions.

Secondly, and more importantly, the officers in question must really be that talented and must actually contribute that much.

Sir, I spoke to a lot of people over the past few weeks about this issue. And curiously enough, I have found that those who argue against high salaries for AOs are frequently serving or former civil servants. They question whether the AOs are all that talented. They believe that AOs are almost never asked to leave, that they receive private sector salaries while retaining an iron rice-bowl and with the prospect of a pension to boot, and that they would not command such salaries if they enter the private sector.

So either those in the civil service know something the rest of us do not, or there is a serious perception gap. Perhaps what is needed is to increase awareness about the contributions of AOs and to have greater transparency in how they are held accountable for their performance.

Paying ministers fairly

Sir, I think that the considerations are very different when it comes to ministers. I agree that people should not have to make “unreasonable financial sacrifices” to enter, or to stay in, public service.

But that simply begs the question of what is unreasonable. What level of salaries would be fair? What sacrifices would be considered unreasonable?

Sir, I agree that ministerial salaries need to be high enough, that worthy candidates will not be deterred from public service by financial considerations. In fact, I do not think that the current MR4 benchmark of $1.2 million per year is too high in today’s world.

I know that many Singaporeans will disagree with me. But we have to be realistic. In a globalised economy where there is massive demand chasing a limited pool of top talent, $1.2 million per year is very possibly at the lower-end of the scale for the very best of top talent.

And I agree that ministers should be entitled to a comfortable lifestyle. I think that we would be demanding an unreasonable financial sacrifice, if we were to ask potential ministers to downgrade their standards of living upon entering public service.

Top talent will expect a nice house, a nice car, or maybe even two or three nice cars, including for the wife and children. Overseas universities for their children, good medical care for their family and parents, luxurious holidays, adequate insurance and sufficient investments for a decent retirement.

Sir, how much does it really take to provide for all that? $1.2 million per year seems enough to me. Still, I am willing to accept that it may not be enough – I make nothing near those levels, and I would hardly know what expectations such top-earners would have. So I am prepared to agree that the number may need to be higher, and may even need to be $1.6, $1.8, or $2.2 million.

But the present benchmarking system is flawed in its mechanics. Many have pointed out these flaws, and I will not repeat them. The only suggestion I would make is to introduce a cap which can be revised from time to time if the Government feels that it is not sufficient for a fair standard of living for ministers. There should also be an adjustment when a minister or top civil servant becomes entitled to a pension.

What it means to be a minister

But the present benchmark is not being changed, and there is no cap. There is no linkage between the benchmark and what it can buy. There is only a linkage with the top earners, whom I think we can all agree will earn more and more as globalization gains pace.

Beyond what is needed to sustain a fair standard of living, what does more and more salary go towards? The salary becomes about the opportunity cost of public service, losing out on the millions waiting in the private sector. It becomes about envy of one’s peers, those raking in the big bucks at the top of the corporate ladder. It becomes about valuing our ministers by their salaries, and not their contributions, both tangible and intangible.

Sir, all that sends the wrong message about our political leaders. It equates political leadership with management. We often hear the phrase “running a country”. I think our ministers do more than just run Singapore. They lead Singapore.

Government is more than just management. Competency and ability at leading and managing an organisation, at problem-solving and policy-making, are in and of themselves not enough to make a great leader. They might be necessary, but they are never sufficient. It might make for an excellent civil servant, but it is not enough for a political leader.

Sir, ministers cannot be just good managers or able technocrats. They must be more than that. They must be leaders of men and women, leaders of Singapore and Singaporeans. A minister must inspire respect and confidence. A minister can be appointed to the office, but he or she will command respect and confidence only because of the measure of the person that he or she is.

But what is the message sent to society when we focus so much on salaries and money, when we equate government so closely with CEOs and COOs and CFOs, lawyers and accountants and engineers? The message is that our ministers are really just managing the country, and not so much leading the people.

Sir, I do not think that that is right or healthy. We rely on the civil service, including the Administrative Service, to manage the country. We look to our ministers to lead us.

I think it is safe to say that every one of us in this House are honoured and privileged to be here. It was a great honour for me to be appointed as a Nominated Member, and I am sure it was the same for my fellow Nominated Members. I imagine that it was an even greater honour for all of the elected Members who won the trust of their constituents, and for Ms Sylvia Lim who won over enough voters to qualify as an NCMP.

But the honour and privilege is greatest for the office holders. We Singaporeans have reposed our trust in our ministers, to lead us into this ever more uncertain future that we call a post-9/11 globalised world. That is, I think, the greatest honour that any Singaporean can have, to be so trusted by his or her fellow Singaporeans.

This honour and privilege cannot be measured in monetary terms. It is unquantifiable. And I would argue that it means far more than any amount that a company can ever pay to an executive. I would even go so far as to say that any person who disagrees, who cares so much about what he or she is paid, someone to whom this honour and privilege is not enough, is not a suitable leader and is not fit for political office.

Being a minister involves a lot of sacrifices. Most of them, such as demands on one’s time and the loss of privacy, are non-financial. And I am sure that many, if not most, who have been asked to serve but declined, did so because of these non-financial sacrifices. So for these people, increasing ministerial salaries would not make a difference.

As for the others, for whom the decision against public service turned on the financial consideration, I would argue that we should not have them in government anyway. They are not suitable for political leadership at all. Their priorities are skewed against public service. And yet, increasing ministerial salaries would pave the way for precisely this group of people to take up public office.


Sir, Singaporeans have been asked to put some perspective around the current $45.5 million for the political appointees, being 0.13% of government expenditure and 0.022% of our GDP. I think there are some other perspectives that can be put around these numbers.

At the revised MR4 benchmark of $1.6 million per year, a minister who serves a full five-year term would have made $8 million. Serve two terms, and that becomes $16 million plus a pension. Even if the minister spends a million dollars a year, there would still be $6 million left over for a retirement in style.

Meanwhile, Workfare will cost the Government $400 million a year. But it is intended to benefit the bottom 15% of the workforce. In 2005, we had 2.36 million workers. The bottom 15% means 354,000 workers. Workfare will cost over 7 times of the aggregate revised salaries of political appointees, but benefits 10,000 times the number of political appointees we have.

Or let’s take Public Assistance. MCYS recently announced a revision to the amounts that Public Assistance recipients will get. Some Members felt that the amounts are still not enough, especially for one-member households. Dr Lily Neo has calculated that a minimum of $400 per month was needed by such households, yet the revised rate for them is $290 per month.

With 3,000 households on Public Assistance, an across-the-board increase of $110 per month would mean an additional expenditure of $3.96 million a year – 7% of the amounts that we will pay political appointees every year after the revisions. Yet, we decline to do so, fearing an erosion of Singaporeans’ work ethic, never mind that one must be unable to work to qualify for Public Assistance.

Sir, there are a lot of different perspectives that can be put around ministerial salaries. My fear is that the singular perspective being applied, of what our ministers could potentially be earning in the private sector, ignores other perspectives that are equally valid and equally important.

We place so much emphasis on using public funds wisely, on sending the right message to society, on not inadvertently creating new problems when we address existing ones. These same considerations must apply when we consider ministerial salaries. It is not just a question of the number, whether we can afford it or its size relative to the stakes involved. There are other considerations involved, and other potential repercussions.

And my greatest worry is that an open-ended linkage between ministerial salaries and top earners, which is how the benchmarks work in their current form, could in the long run undermine the moral authority that a government needs to lead the people.

Moral authority

As our leaders, ministers wield a great deal of authority. They have legal authority due to their positions. They also have moral authority, by virtue of being our elected leaders to whom we have entrusted the reins of government.

Sir, our leaders must maintain that moral authority, so that Singaporeans will instinctively trust that whatever is done by the Government is done for the good of the country. Government is more, much more than mere management. There is an intangible, moral dimension to government and political leadership that civil servants are not equipped to deal with, that have to be addressed by duly-elected ministers.

Our leaders need to have this moral authority to lead the nation, so that whenever we have to ask Singaporeans to make sacrifices for the good of the nation, whether it be workers bearing the brunt of CPF cuts or NSmen putting their lives on the line to defend Singapore, they will respond without question, willingly and courageously, because they trust and believe in our leaders.

I daresay that our NSmen will risk their lives if ordered to by the Prime Minister or the Defence Minister, but not if it is the Permanent Secretary. It is this moral authority that makes all the difference between a minister and a civil servant, a leader and a manager.

Sir, the track record of the ruling party has been almost impeccable. With the benefit of 20/20 hindsight, many an unpopular policy has proved to be the right choice. So, by and large, Singaporeans remain trusting of the PAP, and that shows at each General Election since independence. This present government is no different. It won last year’s election by a landslide, and it has the requisite degree of moral authority.

But we need to ensure that future governments will continue to have that same level of moral authority. The benchmarking system puts that at risk. When we focus on salaries to the exclusion of the moral imperative and considerations of public duty and service, we endanger the moral authority of the government to lead. Because then, cynicism creeps in, and it taints, weakens and may ultimately destroy the bond between the government and the people.

This is exacerbated by the surrounding context of a widening income gap. During the Budget debates, this House heard so much about the income gap, about how it is inevitable, and about what we are doing to address it. The MR4 benchmark is such that ministerial salaries are tied to the very narrow tip at the top of the pyramid, but are decoupled from the stagnant broad base at the bottom. The benchmark itself becomes part of the problem.

Also, a large part of ministers’ bonuses are tied to Singapore’s economic growth. This growth represents the sum total of the efforts of all Singaporean citizens, permanent residents and foreign talents. But thanks to globalization, many Singaporeans are not reaping the fruits of their labours, and are instead struggling to stay afloat. Ministers benefit from this economic growth through the GDP bonuses, even as many Singaporeans do not. There seems to be a certain degree of inequity here.

Sir, we are told that it is an admirable sentiment to want our ministers to be people with that sense of self-sacrifice, who are prepared to make a financial sacrifice -- a reasonable one – to serve the country, but that the real world is different and that this view is unrealistic.

But to me, this way of thinking is not unrealistic. Instead, it is actually an important sieve that filters out the types of people that we should not have in government, people whose desire to serve would be outweighed by a few million dollars, even if their standard of living is not compromised.

I believe that our ministers did not make the decision to enter public service lightly, and they have made great sacrifices in doing so. And because of that, Singaporeans respect and salute them, and give them the moral authority to lead. We have to ensure that future governments are able to enjoy the same degree of moral authority.


Sir, I think we are all idealists in this House. We all believe in this great social enterprise that we call Singapore. We have to, otherwise we would not have sacrificed our time to be here, we would not have heeded the call of duty and served.

We must believe that we are not the only ones with this idealism and sense of purpose. We must believe that there are many other Singaporeans who feel strongly enough about our nation, that they would be willing to make the necessary sacrifices to serve the country.

If we have reached the stage where money is necessary to draw able Singaporeans into public office, then I think we might as well pack up now, because we would have failed, because Singaporeans obviously do not see Singapore as a nation worth fighting and sacrificing for.

Sir, I do not believe that to be the case. To believe otherwise, is to admit failure in our nation-building efforts. I am not prepared to do so. And I hope that the Government is not prepared to do so either, and will show that in future revisions.

Thank you, Sir.


Sze Meng said...

Mr Siew,

Is your only recommendation a cap on the MR4 benchmark, and how do you determine such a cap? So you inherently agree to the benchmark for MR4?

Did you consider the issue is that both the political holders and administrative service share the same salary scale and benchmark?

What do you think of the MP allowance being benchmark to SR9 especially since the MP can continue working?

Thanks for answering if you have time. Cheers!

Anonymous said...

Yes, it is a very good speech.

Excellent pacing.


Recruit Ong said...

Mr Siew, your speech reminds me of the tv ad for gold 90.5FM.. "Hear only the good stuff", or in this case "say only the good stuff".

Jolly Jester said...

Very good speech :=)
I especially like and agree with the moral authority section.

Recruit Ong, maybe you should reread the sections on perspectives and moral authority to get what Mr Siew was really trying to say.

Kevin said...

I believe the MP cap should be lower. If it has to be raised ,then the MP role should be turned into a full-time one.

Omphalos Urdi said...

great speech and well balanced.


family man said...

Thank you , Mr Siew. It was a good speech.

I am a father of 3, I used to respect MM Lee a lot. As MM Lee makes his case on the pay, the country holds its breathe. Now I have to explain to my sons the meaning of self sacrifice, public duty, Service to the nation, volunteerism, and undo the bull shit MM Lee is serving up to the next generation. It is a sad development for Singapore Psyche. And what exactly does the President do to deserve $3mil? I scartch my head.

nofearSingapore said...

Hi KH,
We just try our best to alert to the powers-that-be about how we and our fellow S'poreans feel about the major issue confronting us.
Whether they take it to heart is out of our hands.


sunshin3 said...

Hi Kum Hong, there's got to be more than just the salary as a pushing or even pulling factor when it comes to the civil service.

I am sure you're definitely well aware that it's the kind of work that gives you greater satisfaction than the salary mostly no doubt that remuneration is important as well, at least it truly is for me.

I believe that as singaporeans, we would justify the pay increase and are more than willing for the pay increment to take place only if we on the receiving end of the public sector, is truly getting the service we require from them.

All the WITS schemes etc don't really seem to be addressing the fundamental issue that speed and efficiency is not present within the public sector or how about the cut red tape campaign or feedback unit?

What's come out of it?

Most of the singaporeans have had bad brushes with the civil servants and i have had one too many encounters as well, which explains the mindset that sometimes, pay increases are just not worth it.

Of course, we don't see things as clearly as the ones embroiled in this issue but well, i'm just giving my 2cents worth.


coern said...

Mr Siew,

Thank you for the well thought out speech. I hope something good comes out of the questions you've posed.

Ng Yi-Sheng said...

Thank you.

Siew Kum Hong said...

To all who had kind words to say:Thank you.

To Sze Meng:What I meant to say was that a lot of other MPs had pointed out flaws in the benchmarking process including for MR4, and I did not want to repeat those criticisms. For the record, I agree (and still agree) with a lot of them.

My own suggestion -- based on the contents of my speech -- was a cap on the MR4 benchmark, the level to be determined by the Government. I suppose it could also be determined by a panel or benchmarked to a weighted basket of representative items ala CPI. The mechanics don't interest me so much as the principle of a cap.

As for MP allowance, I think elected MPs put in a lot of hard work. It takes a lot of time, and that represents a real sacrifice in terms of time. I never really appreciated how much until I entered Parliament. I am not sure if a sizeable allowance is the best way to compensate for that sacrifice, but it goes some way towards that. And while being an MP is certainly great for networking, it also impacts earning capacity for some of the MPs who are self-employed or run their own businesses.

To recruit ong:As jolly jester said, unless I've misunderstood your comment, you might want to read my speech again (or in full).

To sunshin3:I wish I had more and better insight on the workings of the civil service. I really do not know. I think as a matter of logic, there will be those who will leave for financial reasons. But I'm not sure if keeping this lot in the service by paying more is the best thing we can do for ourselves. As for the others who leave for other reasons, you have rightly pointed out that higher salaries will not stop them from leaving.

Ahmad Firdaus said...

Mr Siew,

Inspiring speech! You've articulated very well the issues at the core of this pay hike. Allow me some humble words after your well thought out literature.

I believe that everyone has bought into how this country is being run like a corporate organization. We agree to business decisions and yet feel a sense of uneasiness. Why? Because there are other factors that we do not include into the equation like moral authority and the importance for a leader to go the extra mile to establish trust and respect.

As Singaporeans, as citizens of sovereign nation, we do have a metaphorical role as "employees." We work, many taking double jobs, to survive and to build a great country. There is nothing wrong with that and there is really much honour in this duty and service.

The thing is we are often treated as workers and not as citizens and stakeholders of this country. How much say does the average Singaporean have about the pay hike? How about the Integrated Resort? How about the GST increase?

More and more Singaporeans become educated about rights and freedoms and the political roles that they could and should play as a member of a democratic system. The unease grows. Are we Singapore Inc. or the Republic of Singapore?

I heartily agree when you say that Ministers do not run Singapore, they lead Singapore and Singaporeans. Singaporeans will continue to be disenfranchised if its leaders act more like bosses than trusted and respected representatives.

And my father often tells me that trust and respect is gained.

I am unsure how a salary cap will be able to establish this but your parliamentary speech has gained a degree of my respect.

I support the PAP but hope that more will be done to make the average Singaporean feel like a stakeholder in his/her own country. This obviously does not mean making only popular decisions. This is also not a demand from a silver-spooned generation of young brats. This need to feel like our leaders listen and care for us, after we've served our duty as citizens, comes from a deep and fundamental need for fairness and belonging.

In short, less company, more country.

And I mean no threat when I say that if nothing is done, we might reach a tipping point of disenfranchised Singaporeans; and history teaches that this is often a catalyst for political change.

Ahmad Firdaus

Recruit Ong said...

Oh mr siew, don't be so sensitive. Sorry if u take offence hor. I just think your language is overly couched in politeness thats all. Not hard hitting enough unlike
this damn good one. I know its different lah... sylvia and low thia kiang they are street fighters. \^^/

Kaffein said...

Good stuff and read, well-balanced and thought-out.

Think the 'newer' MPs have lots to learn from you.

Why use the civil service pay increase as a front for the Ministers' pay hike? When they wanted to raise the GST, they began to talk about income gap, meritocracy, eliteness, new poor, packages and charity for them, etc. Most are just false fronts in my opinion.

I strongly believe it is going to be like the GST hike - the die have already been cast, no use arguing/debating actually.

I don't want to dwell anymore into the pay increase. Much has been said. And it's not going to make much difference.

Thank you for your speech. Will keep reading your blog.

Siew Kum Hong said...

To Ahmad Firdaus: Re my suggestion on the cap -- it is intended to permit market forces to operate, but only to the extent that its upward operation does not compromise moral authority. It is admittedly a blunt tool, but then so is 2/3M48.

To recruit ong: Don't worry, I don't take offence from comments on this blog or elsewhere. I just wanted to be sure that you did not misunderstand my speech. It is easy to misunderstand if the speech is not taken or read in its entirety.

As for Mr Low Thia Khiang's and Ms Sylvia Lim's choice of speeches -- I think it is important to couch one's argument and message in the most appropriate manner in light of all applicable circumstances. Sure, I could be as "hard-hitting" as them or any of the many, many Internet blogs if I wanted to. But would that enhance, or detract from, the impact of my message? Take a step back from the emotions and think about it.

Believe me, I have received so much pressure in real-life to frame my speech in a certain emotive manner. But I don't agree with the black-and-white reasoning that is so popular at the moment. As you would see from my speech, my own views are a lot more nuanced, because it is a very complex issue.

More importantly, would it have made the Government more receptive to my message, or more resistant? There are many ways to skin, or perhaps in my context to try to skin, a cat. What suits Mr Low and Ms Lim and the blogosphere may not suit a non-partisan NMP.

To kaffein: Thank you!

Focus said...

Started reading your speeches after the most recent ones and I must say you are indeed approaching it in a more non-confrontational manner and does it with grace yet have the bite in it.

Hey, have you considered giving some rejected drafts or revisions of yours to the Opposition so they can help themselves with it. Really ridicously why NMP can give better stuff than Opposition or even the backbenchers of PAP... Why the hell are we paying these people to sit there..

Siew Kum Hong said...

To focus: Thank you. You're too kind. But please do not forget that MPs, in addition to duties in Parliament, also have to attend to their constituents. That is a important role that they also play, and very time-consuming as well.

Francis Chin said...

I agree that political leaders should lead, not manage. CEO-style politicians always have that smell of money (some say, stench) around them. Hopefully, Singapore political leaders do not ultimately end up like the CEO-type leaders such as South Korean president-designate Lee Myunt Bak (accused of past investment scams), Russian president Vladimir Putin (accused of billion-dollar secret holdings of oil and gas companies) and Thailand's disgraced PM, Thaksin (still facing corruption charges).

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