Why pay was not benchmarke​d to that of foreign leaders

Dear DPM Teo,

I refer to four 17 Jan 2012 Straits Times reports of your speech in parliament:

Why pay was not benchmarked to that of foreign leaders

You said since salary is pegged to the middle of the top 1,000 earners, it won’t change even if the salaries of the top 499 rise. You mean the 500th top earner in Singapore won’t see significant pay rise over the next five years? How can this be? Even the top 10,000th will see faster than average pay rise let alone the top 500th.

You said Singapore has a smaller pool of able people compared to Britain and Japan. Then what about Switzerland, Sweden, Finland, Denmark, Hong Kong or New Zealand? Their populations are much closer to ours than Britain’s or Japan’s. These countries show that you don’t need to pay top dollar to politicians to secure good prosperity even when populations are small. Furthermore, the prosperity of these small countries are largely driven by private sector firms like Rolex, Omega, Nestle, Norvatis, ABB, Ikea, Nokia, Angry Birds, Maersk. Therefore, the critical element of progress is not government talent but talent itself regardless of whether it came from government or the private sector. Perhaps Singapore can progress even further with less government talent but more private sector talent. We should pay politicians less to encourage them to show their talents through business startups.

You said Singapore doesn’t have the cushion of the EU like smaller European nations do. But Switzerland is not even in the EU. Yet it was completely ignored by the PAP even though it served as a good comparator for Singapore since we once aspired towards the Swiss standard of living. Smaller European nations like Sweden, Finland and Denmark were already prosperous before they joined EU and never had need for the EU cushion. Recent events have shown that the EU cushion is not so cushiony after all but entails heavy austerity measures instead.

You said it will be problematic to choose an appropriate multiple of the median or bottom 20% income to arrive at ministerial salary. Yet you see no problem discounting the inflated ministerial salary by 40%. How did you come up with 40%. Isn’t that equally arbitrary?

You said the benchmark has to link comparable abilities and skills. But the recent crop of new political appointees didn’t come from the top 1,000 earners they were benchmarked against. How then do we know they have top 1,000 abilities and skills when they didn’t come from the top 1,000?

Passion alone not enough to run country well: DPM

You said the top 1,000 earners hold professions or positions that Singaporeans in their late 30s or early 40s would aspire to in a few more years. Yet, without actually attaining these professions or positions, there is no guarantee that the new crop of political appointees would eventually achieve those professions or positions.

You said if the salary discount is very steep, a person in his prime may postpone entering politics. But for most of the new political appointees, entering politics is not a salary discount but a salary jump instead. If they are already in their prime, why are their previous salaries so far from their current political salaries?

Minister’s pay not automatically $1.1m

You said $1.1 million will only happen in a normal year. But the performance indicators are so close to what Singapore has been achieving in the past five years, a normal year doesn’t seem far beyond reach.

$46,750 is not the pay of the minister but that of the minister of state instead. You said the PM can appoint a minister below the MR4 grade by appointing a senior minister of state as an acting minister. But an acting minister is still not a minister yet.

It’s the principles behind the numbers that matter: DPM

You said we are a city state critically dependent on good governance to survive and to succeed. Hence, more so than other countries, we need to get the best possible leadership from our small population. Hong Kong, our closest cousin, is a city with a small population too. Hong Kong never stressed the need for good governance to survive or to succeed because Hong Kong knows that its success cannot be due to good governance propping up lousy people. Similarly, the critical element of our success is not just good government but good people too. So even if we can’t benchmark defence and foreign affairs minister salaries against those of Hong Kong’s, surely we can benchmark health, education, home affairs, national development minister pay to those of their counterparts in Hong Kong?

You said Singapore progressed because of capable, honest leaders in government working with the people. The reverse is also true. Singapore progressed because of capable, honest people working with the government. So pay the people millions too?

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