Thursday, 26 April 2007

Straits Times article on 14 April 2007 on ministerial salaries

The Straits Times ran an article on the ministerial pay issue on 14 April 2007. There were a couple of quotes from me in the article. I've reproduced below the e-mail interview in full. Questions are in bold.

1) How much political capital has the Government expended on this pay hike? What is the political cost?

Short answer is, a lot. Aand I think it is clear from PM's speech that the Government understands this, but decided to push ahead notwithstanding the cost, because of how important it thinks the issue is. In a way, it says a lot about how the PAP governs -- decisively, and proceeding with what it believes to be the right course however unpopular or costly it is.

a) How long will the negativity last?

Probably not that long. People normally do not have elephantine memories. The anger in 2000 didn't really carry over into the 2001 GE, did it? Having said that, I'm sure that a small group will still be harping on this, or will be raising this again, by the time the next election comes around.

b) Can the Government ride it out?

Almost certainly. There will be new issues, new controversies. The one before this was the projection of 6.5 million population. Before that it was the income gap and how to help the poor. There will always be something new.

c) Some netizens have described this issue as the tipping point? Do you agree?

No. The change this time is one of quantum, not of principle. The principle is fairly entrenched. The real question is whether the quantum will ever hit such great heights that this issue would then become a tipping point. My own feeling -- and this is a big motivation underlying my speech -- is that in the context of globalisation and a widening income gap, ministerial salaries could become a tipping point at some point. I don't think we've reached that point yet, but it could come. If we go the way of the US (which unfortunately seems more likely than not), I think it will come at some point.

And then what would happen? Would there be a tsunami of anger and resentment that results in that freak election result that the PAP always warns Singaporeans about? I am not casting aspersions on the ability of the opposition, because for all we know they could very well be a most credible alternative by then, but what would the PAP think if that happens?

I don't know. Nobody can predict the future. But I don't think that that is impossible.

d) Do you think the health of the economy is a major factor in how people will come to terms or accept the ministerial pay hike? As in, if the economy continues to be good, will it soften/cushion the blow?

I think if the economy continues to be good, it will help some people get past it. But don't forget, we live in a society where a widening income gap is almost a given. Chua Lee Hoong (I think) referred to media wage stagnation a few weeks ago. So even if the economy continues to be good, there will be a large group that will not benefit. Workfare is intended for them, but if you consider the amounts, it may not be enough.

2) While some MPs like K. Shanmugam supported the increase, they also said that there is no other issue where there is a greater disconnect between the people and the Govt. Do you agree? How big is this disconnect?

I agree. It is a huge disconnect. Just visit the blogs and forums, or read the newspaper letter pages. Even offline, in the real world, I have not met anyone who came out unabashedly in favour of the increase. In fact, most people are outrightly opposed to the quantums. My own views are actually a lot more supportive of the increase than most of the views that I have been asked to present. So it is a massive disconnect, and I am hard-pressed to think of any that is greater.

3) What has the debate achieved?

I think it has allowed the Government to present its arguments in a manner for maximum effect. If PM or Minister Teo had simply presented all of their arguments in a statement or a press conference, without any debate, then there would have been a huge amount of cynicism and in all honesty I think most people would have ignored it and all the media coverage.

But by having a debate, it draws people's attention to it, it focuses their attention on the issues, and it gives the Government a much better platform for presenting its arguments. Even though I think not many people would have been swayed, they would have heard the arguments. I think you cannot understate the importance of that. Even if they disagree, they would know the arguments.

And who knows? The economic logic is indeed compelling (and although I agree with the economic logic, my argument is not with the logic, and the frames of reference are completely different so the fact that the economic logic is compelling doesn't really address my concerns), and maybe some would have been convinced.

For myself, I hope that the Government heard the concerns of myself and the others who did not fully support the increase, and will remember them. I think at this stage, that's all we can hope for.

4) What was good and bad about the debate?

What was good was the transparency. I did not realise the magnitude of the gap between the MR4 benchmark and the actual salary. The Government really could have just restored it to the benchmark, and they would well have been witin their legal rights and authority to do so. So all credit to the Government for taking the bull by the horns and dealing with it in a transparent fashion.

I won't comment on what was bad, apart from what I mention in point 7.

5) What are some outstanding issues? What issues do you think will continue to fester?

The mechanics of the benchmarks remain flawed. They came under so much criticism. If/when salaries are reviewed again, those criticisms will re-surface. I don't think the Government has really convinced those of us who do not agree with the mechanics. (And I do disagree with those mechanics and can say a lot about them, for both MR4 and SR9 benchmarks, but chose not to because of timing issues and to focus my speech better.)

6) PM Lee has offered to donate his increase to charity. Do you think this move has opened up another flank in the debate? Does it mean that the Govt is retreating on this issue, as some netizens have suggested?

I applaud the PM for his gesture, which I believe to be sincere and not political gimmickry or grandstanding. I don't think it has opened up another flank in the debate per se, because it would be petty to question it, although I am sure some will. I also do not think it is a retreat -- if anything, I actually think that the PM had already decided to do it before the debate, but chose to disclose it only at the end of the debate.

I only hope that if anyone follows his example, there is no political grandstanding or, as PM put it, ostentatious public displays.

7) The Govt has provided more information during this debate than in 1994 and 2000. What accounts for this greater desire for transparency?

Perhaps the great or maybe greater public outrage?

Actually, I think that the disclosure of information is something that could have been better managed throughout the entire debate. Why did the PSD wait until so long after the PM's speech at the Administrative Service dinner to release details on the pay schemes (the one-page pull-out in ST)? Why wasn't it disclosed from the beginning, that the package is all-inclusive including bonuses (although when I filed a cut with MOF in the COS debates, this was actually answered by Minister Teo in an oblique fashion), how the bonuses were structured, how many Administrative Officers had resigned over the years and for what reason, etc. etc. etc.?

I know that, by the end, we had pretty much most or all of the material information. But think about the people who did not follow all of the news articles closely, and came away with all kinds of misconceptions about ministerial salaries that have not been corrected -- what are we to do with them? So I think greater upfront disclosure of more relevant information would have been much more positive.

8) PM said that this is his toughest decision. How does it compare with the Integrated Resorts?

I think this is much more emotive than the integrated resorts. It galvanised pretty much most or all of the population. The IRs really galvanised only those who opposed it, which if I recall correctly was about half of the population.

9) Are people tired of the debate?

Well -- for me, I'm not so much tired of the debate, as tired from the sittings! Actually, I do think it's time to move on. There are other issues to deal with. And in a way, I was glad to see the end of it and to see Parliament get back to the normal business of lawmaking today. It is no less important, and it is good to get away from the emotions.

I hope that people will stop harping on it after a while, and I think they will. I think give it some time, and they will move on to other things. After all, how long can you really keep flogging the issue? And then, when the next GE comes around, we should all look back, in a calmer, more rational and less emotional manner. The people can then assess and decide on whether the pay increases have worked. Because ultimately, the real test is not what we say about it, but whether the pay increases have succeeded in retaining existing talent and drawing new talent, and whether the fears expressed (including mine) have materialised.

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