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New ministerial salaries effective from 21 May 2011

Prime Minister Lee Hsien Loong has decided that the new salaries for political appointment holders will take effect from 21 May 2011, the date when the new government took office.

This suggests that recommendations by the committee appointed to review the ministerial salaries will be accepted once finalised.

Also, the Prime Minister's Office (PMO) has released the terms of reference for the review of the salaries of political appointees and the President, indicating where there would be significant cuts.

In a statement on Sunday, the PMO said the review would include the President, Prime Minister, political appointment holders and Members of Parliament (MPs).

Based on the PMO's statement as quoted by Channel News Asia, as a guideline, the review should take into account that the salary of ministers "should have a significant discount to comparable private-sector salaries to signify the value and ethos of political service".

Also, "while the salary of the President should reflect the President's high status as the head of state and his critical custodial role as holder of the second key, it should also take into account the fact that unlike the Prime Minister he does not have direct executive responsibilities except as they relate to his custodial role," the PMO statement read.

Although the salary for the President will in principle commence from the new term of the President, the President has informed PM Lee that he will adopt the new salary from 21 May 2011.

The Chairman of the committee reviewing ministerial salaries, Gerard Ee, has revealed that his committee will adopt a very different model to assess how much ministers should be paid.

Current salaries are benchmarked to two thirds of the median income of the top eight earners from six professions such as lawyers, in the private sector.

However, the committee will use job specifications of ministers as a starting point.

Ee told Channel NewsAsia that there should also be other points of reference, such as a general wage level.

This means when the economy goes up or down, the salaries should also have a mechanism to reflect this.

"The big difference is that this (model), you look at the work and you say for this work, for this skill, for this knowledge in the private sector, how much will you have to pay to have someone perform such a work?" said the Chairman of the National Kidney Foundation and Changi General Hospital.

"It's a very different model altogether."

Ee, who is a former Nominated MP, said he accepted the role after he was approached by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam less than a week ago.

He said that the committee will need to collect a lot of data involving experts in human resource and it will come up with recommendations that still need to be robustly debated in Parliament.

Ee added that the committee will not rush matters.

However, any changes to the salary scales will take effect retrospectively from the day the ministers were sworn in.

"You can expect, that in all probability it would be a cut," added Mr Ee.

The committee will have a total of eight members from the private sector, labour movement and social sector and it will be chaired by Mr Ee.

The seven other members are:

- Mr John De Payva, President of the National Trades Union Congress

- Ms Fang Ai Lian, Chairman of the Charity Council and Chairman of Methodist Girls' School Board of Management

- Mr Stephen Lee Ching Yen, President of Singapore National Employers Federation

- Mr Po'ad Shaik Abu Bakar Mattar, a member of the Council of Presidential Advisers and a member of the Public Service Commission

- Mr George Quek, founder and chairman of Breadtalk Group Ltd, Vice-President of Teochew Poit Ip Huay Kuan, Chairman of Xinmin Secondary School Advisory Committee

- Mr Lucien Wong, Managing Partner of Allen & Gledhill LLP and Chairman of Maritime and Port Authority

- Mr Wong Ngit Liong, Chairman of the National University of Singapore Board of Trustees and Chairman & CEO of Venture Corporation Limited

In a statement from the Prime Minister's Office on Sunday, it said that the committee's terms of reference will be to review the basis and level of salaries for the President, Prime Minister, political appointment holders and Members of Parliament to help ensure honest and competent government.

The committee should take into account salaries of comparable jobs in the private sector and also other reference points such as the general wage levels in Singapore.

The committee should also take into account the following guidelines:

While the salary of the President should reflect the President's high status as the head of state and his critical custodial role as holder of the second key, it should also take into account the fact that unlike the Prime Minister he does not have direct executive responsibilities except as they relate to his custodial role;

The salary of ministers should have a significant discount to comparable private sector salaries to signify the value and ethos of political service.

The government will base its new salaries on these recommendations.

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