Money Issues

So the recent proposal of salary amendment was released and obviously many people aren’t satisfied about it. Personally, I don’t find the cut satisfactory when using an international benchmark (comparing vis-a-vis the responsibility by leaders of other countries) but the results are pretty much within expectation. A drastic cut would literally cut away at whatever harmony and morale left in the PAP government, and an internal disintegration would be worse than leaving a portion of citizens being unsatisfied. After all, they still have 4 more years to prove their worth.

In addition, there is not much margin left to cut considering that the top management of Government-Linked-Companies are already earning a very high salary. It doesn’t make sense for the CEO of SMRT or Singtel to earn more than a minister (at least in PAP logic, although CEO of Keppel group seemed to be paid more than a minister in a good year when bonus and options are included). In fact, the entire pay structure of top civil servants would prevent a humongous cut from happening since our permanent secretary alone (and I haven’t add in the bonuses) earns more than the U.S. president. In a way, it’s like a domino. If you want a truly significant reduction, it would mean slicing all the way down to the civil servants, which is actually a bad thing if you ask me.

However, I must say that the salary cut is a good step towards a more democratic society, where an increasingly vociferous population is snatching back power monopolized by the government. The only issue I have is the ridiculous bonus scheme. Even if the new proposal is adopted, the maximum bonus is still more than 14 months–a scheme that is so rare in the private sector. In typical oxymoron fashion, the government benchmark their pay to the (top earners of the) private sector but devised a bonus scheme that is out of this world (the current scheme allows bonus up to more than 24 months). The proposed benchmark based on 4 factors sounds valid but there is a deeper sinister meaning:

  1. GDP growth—ok, so GDP growth still plays a part
  2. Unemployment rate—since S’pore’s unemployment rate is forever so low (since the 80s!), GDP still plays the major part. Why do you think there are so many foreigners? The country’s problem is not enough workers, not not enough jobs. For this, I commended the government for doing such a great job in pulling in companies to set up businesses in Singapore (that policies is almost crafted solely to meet business owners/ MNCs’ needs)
  3. Median Income of TOP 1000 Singaporeans income earners—bias policy might be created to favor this elite group. We already see the chairman of the Real Estate Developer Association of Singapore to have the cheek to warn (and threaten) an economic downturn and asset devaluation due to new property cooling measures. And again, it’s about pushing through the GDP express train so that the top earners would benefit. I foresee greater income disparity.
  4. Real growth in bottom 20% of income earners—This sounds politically right. But basically, all you need to do is to increase foreign workers levy which makes it more expensive to hire cheaper foreign labor, score some political point for correcting a policy that Singaporeans don’t like, and indirectly force some companies to pay a higher pay to Singaporeans. Or, the government can simply introduce minimum wage policy, score more political points and raise the bottom earners by a few dollars. At such low salary, any increment would be significant. When you are earning $800 a month, a $50 increment would translate to 6.25% jump in income.

If you look closely, the essence of the policy doesn’t change. It is still about the economy. It is still mainly about money. Point 2 is easily achieved going by the current low Singaporean population and the low replacement rate. Point 4 can be easily achieved too. And point 1 and 2 is solely on driving the economic train. In fact, points 1,2 & 3 go hand in hand together. You can’t get one without the other two. While I admit economic growth is important, the idealistic me would rather see benchmarks such as improving health-care (made even more important in an aging society) and public goods such as transportation (yes, I definitely feel that a ‘nationalized’ bus and train service is still the responsibility of LTA. If not, why would we even need a minister of transport?) and housing (a major problem). How about replacing point 2 & 3 with population control (measurable), waiting time of public transportation (measurable), and waiting time to get and affordability of a HDB flat (also measurable) since such factors directly affect most Singaporeans?

In the meantime, we yet see another minister who just could not keep her mouth shut and start spouting stupid comments. Grace Fu, in yet another ungraceful ‘PAP-style-I am misinterpreted’ episode (see here) could do better to keep her opinion to herself. Why would she comment that pay is not a major factor when at the same time insinuate a lower pay scale would mean a lower standard of living? On the other hand, maybe I should commend her on her honesty and bravery for not deleting the post (or maybe she realized netizens would have screen saved it any way).

This is not the first time we have seen how politically ‘unsavvy’ PAP candidates are…maybe they need EQ lessons, provided they have some emotional quotient left in their brain.

P.S. I wasted a few minutes of my life reading through the recent post by Tin Pei Ling. In a new year, I was hoping for some improvement. Yet, I see another noble-sounding post that didn’t add value to my time spent. And while more than 80% of the essay is about what is already being done and how the ‘Community’ is helping and ‘reaching out’ to the public, the last paragraph talks about not depending on the government. Isn’t it an irony? An MP of the ruling government asking the public not to depend on the government while taking in $190,000 a year.

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  1. Foo
    January 7, 2012 at 12:04 pm

    Do read up more on the perks President Obama apparently enjoys, including vacations that cost taxpayers millions of dollars, instead of focusing on his base salary.

    http://www.inquisitr.com/172020/president-obamas-hawaii-vacation-will-cost-taxpayers-4-million/

    I certainly do not want my tax dollars paying the vacations of my leaders!

    • January 8, 2012 at 5:48 am

      Note that the bulk of that $4m comes from the plane. The AirForce One is created for security purposes and the president have to travel in such special purpose vehicles. The U.S. President, unlike our dear PM, faces a lot more danger (obviously given the many US haters especially within the middle eastern countries) and escorted travel is a must. To quote LKY’s words, ‘to put it in perspective’, the US economy is US$15 trillion, which is about 75 times the economy of Singapore. So what is US$4m?

      Such practices of using special transportation vehicles is not unique to the United States. UK, Japan, Denmark, Ireland, France etc also has this practice. Not just among the developed nations, developing countries such as Philippines, Indonesia and Kenya also has this practice. Because such vehicles are exclusively reserved for the usage of heads of states, it becomes a humongous cost that makes vacation for the US president expensive. As the safety of the president is a national security issue, the $3m plus of AirForce One does not only consist of ‘vacation cost’ for the president but also include the cost for ‘national security’. It’s not like a US president can travel like normal citizens on his off days. Off days or not he is still the president. Would you compromise on security to save that few millions for the world’s largest economy? Either that or the poor US president is unable to travel to anywhere on his off days simply because the $15 trillion economy wants to save a few million dollars.

      Singapore politicians faces a much lesser degree of danger the US president faces. And maintaining a fleet of vehicles for exclusive travel is not economically feasible given that the government is already a major shareholder of a very good airline — Singapore Airlines. So Singapore politicians usually simply travel first class in SIA. Then again, it is not unknown for some to travel by special military planes sometimes. Should we also include that cost into the equation, it would not be unlike what the article you provided.

  2. Nominee Investor
    January 9, 2012 at 4:17 am

    Well, I guess its only fair that the Ministratrial Salary Review committee disclose all other cost borne by the taxpayers not included in the salary. I am sure there will be asistants and bodyguards present when our PM or even MM goes on a holiday trip. I recall an SQ plane was refitted for the MM’s wife. Who paid for this? I was told Mr Lee paid for all medical services but did it include the cost of refitting the plane. How was was the cost, was it a nomimal fee? etc etc. There are many questions like this, unforetunately Singapore is not as transparent like the States, where a citizen can get all the details of their political leaders. Till today, no one actually knows the worth of the great political family or the other Ministers. Many were looking forward to know how much a certain lady was worth based on the estate duty but were terrribly dissapointed when it was abolished just before her death. So in essence, till we have detailed information of the assets of our leaders , we cannot take their word that they did not enrich themselves. I for one have lost my faith in their words and promises a long time ago.

  3. 刑加缚笨蛋
    January 11, 2012 at 3:53 pm

    The logic of politicians’ remuneration:

    You propose a formula for your own salary and present the proposal to the parliament for approval. You and your cronies have total control of the parliament. You know your proposal is definitely passed without meaningful debate.

    You propose salary formula for you and your cronies to base on a group of top earners who are mostly from GLCs and your cronies’ companies. You also know that your controlled parliament will pass your proposed formula. Next thing you do is to get GLCs and your cronies’ companies to pay the chief very very well. As such, your and your cronies’ salary will be increased accordingly.

    After the people object to your proposal, you appoint one of your cronies to review the proposal and he recommend a revised proposal that you and your cronies (not the people) are happy about it. Then you present the revised proposal to the parliament again for approval. You know that all your cronies in the parliament will support the revised proposal because the revised proposal is for their own good. The parliament is still dominant by your cronies and the revised proposal will be approved without any question. 


    After the revised salary proposal is done, one of your cronies can say she suffer pay cut by joining politics. She claimed she could earn much more in ‘private’ sector. Look at what ‘private’ sector she has worked before joining politics. She has worked for few GLCs before invited to join politics. Are GLCs really ‘private’ sector? If she is right, those GLCs must have paid her very very high salary. This proves that if you have raised the GLCs chief salary this will actually effect higher salary for you and your cronies. 



    By controlling the corruption at lower levels, foreigners who do not know the details of this system will believe that a pro-business governance system is free of corruption. Is the system really corruption-free?

    Based on the logic, it proves that the current system is very very clever to ‘legalize’ corruption at the highest level. If not, what is it?

    You may look at the logics of GRC, NCMP and NMP. It is not difficult to understand the ultimate motive behind a fake democratic ‘feudal dynasty’ politics in action in a modern world.

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