Opposition leaders respond to ministerial pay review

(UPDATE on 6 Jan '12 at 6:11pm: comments from WP added; 8 Jan SPP comments added)

Opposition leaders welcomed the recommendations raised in the ministerial salary review report released on Wednesday but also maintained salaries were still “exceptionally high”.

The Singapore People's Party said in a statement dated Saturday that if the government decides to match ministerial pay to the top earners in the private sector, then measures of accountability and key performance indicators must also match.

SPP non-constituency Member of Parliament Lina Chiam said, "The main KPI for the Minister for Transport, for example, should be the quality of Singapore's public transport system. His KPI should not be the general state of the economy, as is provided for in their New National Bonus."

The Singapore Democratic Party (SDP) and the National Solidarity Party (NSP) both felt the revised salaries of Singapore’s political office holders still had room to move downwards. The SDP called for annual salary revisions, while the NSP said that the cuts are insufficient.

The Workers' Party (WP) said on Friday that the recommendations made were "a step in the right direction", but like the NSP, disagreed with the formula used as a basis for the new salaries.

The SDP’s head of policy unit James Gomez told Yahoo! Singapore that the party welcomes the reduced salaries recommended by the committee, but hopes it will continue downwards every year until it meets international political salary standards.

“It is a recognition that the salaries up to date that the PAP ministers have paid themselves were extremely high, and didn’t find resonance with the voters,” said Gomez.

He argued, however, that the recommended salaries for the Prime Minister and other key office holders, including junior ministers, are still significantly higher compared to heads of state in other developed countries. A Reuters report said that despite the revisions, Prime Minister Lee is still the world's highest-paid minister with an annual salary of $2.2m, compared to Australian prime minister Julia Gillard, who after recent proposals will be paid about $639,000, Hong Kong's chief executive Donald Tsang, who earns about $550,000, and U.S. president Barack Obama, who receives about S$514,480 annually.

“The terms of reference issued by the Prime Minister’s Office to the review committee still urged it to look at the (salaries of the) private sector and take a discount. As such, the committee’s consultants… took that as a guideline, instead of looking at international salaries of political office holders,” he told Yahoo! Singapore.

Gomez noted that the abolishment of the pension scheme was a welcome move, but added that there will be older ministers and other political office holders who continue to draw pension alongside the new salaries allocated.

He added in a subsequent statement that the total possible sum of an annual 20-month payout does not reflect the employment situation of most Singaporeans, who are unlikely to earn six months of additional bonuses over and above their fixed 13th-month quantum and annual variable component, if the year-end bonus is even paid to them.

NSP: Pegging to top 1,000 earners aggravates income gap

The NSP, on the other hand, disagreed fundamentally with the benchmark chosen by the review committee, as well as the quantum of the revised salaries proposed.

Party secretary-general Hazel Poa told Yahoo! Singapore that to them, pegging ministerial salaries to the median of the top 1,000 earners in the country will serve to widen the income gap should salaries of top earners rise in future.

“(Pegging to the top 1,000 earners) sends the message that ministers are with the top earners rather than in the same boat as the man in the street,” said Poa. “If income inequality rises, top earners are getting more in the economic pie, and ministers also get more when that happens.

“We don’t disagree with setting high salaries for ministers, but the benchmark should be tied to general wage levels, like the median wage of working Singaporeans,” Poa continued. She acknowledged that while this requires a certain multiple, which the committee decided would be too arbitrary, she argued that the decision to take a 40 per cent discount off the median from the top 1,000 earners is also an arbitrary amount.

“We don’t feel that is a valid argument for why it is not a good idea to use median wage (of working Singaporeans in general) as a benchmark, because (by doing so), it sends a message of unity with the people, and this is important for members holding political office,” she said.

She agreed, however, with the committee’s move to adjust the President’s pay to below that of the Prime Ministers, so that it is “more reflective of their responsibilities”.

Reform Party: Review in short a "public relations exercise"

In a statement released late Wednesday night, the Reform Party shared its disappointment with the outcome of the salary review, calling it nothing more than a "public relations exercise".

Its secretary-general Kenneth Jeyaratnam highlighted a statement made by the review committee that said the benchmark ministerial pay falls closer to the top 1,400th earner in Singapore after the 40 per cent discount is factored in, saying that the benchmark quantum would more likely fall closer to the 700th earner, which he explains is what 40 per cent more than 500 comes to.

"A reasonable inference resulting from this kind of elementary statistical mistake leads one to doubt the quality of the statistics used by the committee to underpin the pegging of the salaries," said Jeyaratnam.

"A discount on the 500th highest earner isn't a sacrifice by any definition that any ordinary Singaporean could relate to and to call it a sacrifice is deeply insensitive in the current economic climate," he added.

He also pointed out that benchmarking salaries in the manner recommended allows ministers to "piggy-back on the hard work of those in the private sector who are genuine wealth-creators", adding that political office holders may raise the salaries of members of the public sector, both civil servants and executives in Temasek Holdings, among other government-linked companies, to justify their own salary increments.

He said, however, that the party was pleased at the committee's recommendation of pegging the National Bonus component of political salaries to the growth rate of median incomes of Singapore citizens, that of the lowest 20th percentile of citizens, the unemployment rate and the real gross domestic product growth rate.

A step in the right direction, but formula is flawed: WP

In a statement released on Friday afternoon, the Workers' Party, which is represented by six members of parliament (MP), noted that the recommendations clarified the nation's leaders' sense of public service.

"We hope that Ministers and MPs will see political office primarily as a noble undertaking which allows them to improve the lives of fellow Singaporeans, rather than as a career option to be weighed against high-earning individuals in the private sector," the party said in the statement.

The WP added that the formula of taking a 40 per cent discount off the salaries of the median of the top 1,000 earners in Singapore assumes that political talent is found only among that select group.

"This reflects an elitist mindset that earning power is the primary indicator of one's ability," the statement added.

Turning to bonuses, the WP voiced its support of the variable component taking into account the national objectives of GDP growth, unemployment rate and real income growth, although opposing the existence of the Annual Variable Component, deeming it unnecessary following the implementation of the National Bonus.

It also said the total variable components should add up to a maximum of a reasonable number of months, adding that its MPs will expand on other proposals the party made in response to the review on the 16 January parliamentary sitting, when the topic will be tabled for discussion.

The Singapore People's Party's representative in parliament, Non-constituency MP Lina Chiam, said that the party will study the recommendations made and "see whether they benefit Singapore as a whole". She added that she will then present the party's position in Parliament on 16 January.