Wednesday, May 25, 2011

Illusions of democracy

May 21, 2011

The Internet is an extraordinarily powerful tool. It has changed how we do business, how we do politics, and even how we change our leaders - at least some of the time.

But the ease with which we now communicate, the efficiencies we take for granted, can give us a false sense of how easy it is to follow through on some of these changes. Despite the importance of social media in fomenting revolution, and even in deposing deeply unpopular leaders, governing in the real world is not as easy as governing online.

This struck me last week when I listened to one of Egypt's new online generation talking enthusiastically about the future. His thesis was that once people have tasted freedom, once the oppressive leader is gone, they will naturally live as free people and build a new, democratic society without much central oversight.

I wish I could believe that it will all be as easy for Egyptians as running a Facebook group was. Generally, the Internet is a tool for people whose basic needs are already being met. Members of the upper middle class in any country, including Egypt, often seem to forget that for most people, the value created on the Internet cannot feed, clothe, and house their families.

In centuries past, revolutionaries were farmers or blacksmiths or merchants; now they are Google executives and Facebook friends. The Internet joins the elite of the world. But it also cuts people off from the past and a sense of history. The exciting things that happen online are not the same as what happened offline in countries such as Romania and Kyrgyzstan, let alone in Libya.

In fact, habits are often stronger and more persistent than either insights or presidents. People may want a world free of corruption, but it is hard to understand how such a world works. When you are starting a new company and you need to get it registered quickly, how can you get the bureaucrat to do his job and move your paperwork along?

In many countries the answer is obvious. And, from the bureaucrat's point of view, his or her salary might be pathetic, but it comes with a steady stream of facilitation payments. That bureaucrat does not feel corrupt; he plays by the rules he signed on for when he got his job, and he does not want them changed mid-game.

There are many people in this or a similar position, and they all depend on one another to make a corrupt system work. It is difficult for them to understand how it could be any other way. Of course, they know from the media - indeed, from the Internet - about transparency and freedom, but without quite understanding how it works.

I am often reminded of the Russian tech entrepreneur I talked to many years ago, back when the Soviet Union was falling apart. "It's great!" he said. "Our government is going to set free-market prices just like yours."

I do not want to be gloomy. People in the Middle East and other emerging democracies have definitely changed from their recent experiences, and their expectations have been raised. But they need to understand the challenges they face in building a new society.

The Internet may have made this transition seem too easy. In Internet communities, it is fairly easy to build consensus. Membership is voluntary, and people who do not like the rules can leave. Or they can be kicked out: There is no requirement for due process.

Moreover, many resources are infinite on the Internet. People are not fighting over scarce housing or lucrative jobs. They are befriending one another, sharing information, and accumulating status, points, and experiences.

But in the real world, even online, things are not so easy. Consider eBay, a wonderful and mostly successful melding of the online and offline worlds. It has a huge budget devoted to deterring and detecting fraud, and it can simply ban fraudsters. The company's success makes governance look easy, but that success is misleading. Unlike eBay, a country needs to put its criminals in jail and keep them there; it cannot simply cancel their accounts.

Every society has its bad actors, and it needs an established (and accountable) authority to deal with them. Otherwise, the bad guys will take advantage of the good ones. What that means is that the newly freed people of the Middle East must toughen their idealism with hard realism. They need to figure out how to negotiate and work with existing power structures - such as the army and the Muslim Brotherhood in Egypt.

Like it or not, they cannot do that as a brigade of flower children; they need to pick leaders who can speak for them and negotiate for them. The modernisers need to form a coherent force - and most likely a political party - rather than simply relying on the wisdom (and good behaviour) of the crowd to govern the country.

That does not mean that activists should abandon the cause for which they are fighting. But it does mean understanding that even democracy has many rules - ideally rules that a majority has chosen. But they are mostly not chosen directly; those rules generally reflect compromises among elected representatives who can argue and negotiate in person, reflecting the overall preferences of those who elected them.

That may sound a little too much like the old system, but it does not have to be. Online, if you do not like the rules, you can simply leave and form a new community. Offline, you need to stay and help to change the rules for everyone.

PROJECT SYNDICATE

Esther Dyson, CEO of EDventure Holdings, is an active investor in a variety of start-ups around the world.

The return of politics

May 24, 2011
Politicians will have to put people at the forefront of policies
 
By Li Xueying

ON NOMINATION Day, a crowd of Singaporeans turned up at Deyi Secondary School to cheer their teams, waiting patiently in the field under the sun.

The candidacy of the People's Action Party (PAP) and Workers' Party (WP) teams was confirmed several hours later. The candidates addressed the cheering crowds. Some went down to the field to greet supporters. I saw some PAP candidates being feted and carried aloft by supporters.

But the WP team did one thing more.

Mr Low Thia Khiang led his team-mates to the gate of the field. They stood there humbly in line. And then, in the noon-day blazing sun, they shook hands with each supporter streaming out and thanked them one by one.

'That, truly, is a politician,' I thought to myself.

As Singapore enters a new chapter in its political development, MPs and ministers will have to relearn how to win not just the minds of Singaporeans, but their hearts too.

No longer can PAP ministers be just technocrats, intent on crafting the right policies, secure in the confidence that Singaporeans will swallow the bitter pill of 'unpopular but necessary' policies because it is good for them in the long run.

As Prime Minister Lee Hsien Loong noted last Wednesday in introducing his new Cabinet, ministers need to make 'not just policy judgments but political judgments'.

The PAP was born out of the political acumen of a small group of leaders. In the uncertain era before Singapore's independence, Mr Lee Kuan Yew was the consummate politician - a charismatic orator and a master strategist able to galvanise people to give their support to the Government's policies.

After remaining in power for decades with no serious challenger, the PAP has come to rely more on its track record and its ability to deliver a stable life in order to win elections. Some say it is the PAP's track record that wins elections; not necessarily the PAP candidates contesting in each election - many of whom are political neophytes, compared to the Old Guard, even if they had been in Parliament for a couple terms.

For example, two decades of walk- overs in many constituencies meant that four ministers in the old Cabinet had never won an election before May 7.

But political skills can no longer take a backseat in Singapore.

The world is more unpredictable and governance more complex. Not even the sharpest minds can grasp all the possible exigencies that can occur. At the same time, a changing electorate is no longer content with just having a government who helps put food on the table and ensures security on the streets. They want higher-order Maslovian needs fulfilled - to feel respected and valued, listened to, and to have a say in national decisions.

As former Aljunied GRC MP Lim Hwee Hua noted in a recent interview after losing her seat in the May 7 polls, this means that 'it is sometimes not the most optimal solution that is the best, but the one that is the least objectionable that is the best'.

As the former Second Minister for Transport, Mrs Lim probably learnt this lesson well. Distance-based fares for buses and the MRT, introduced last July, were a classic example of a policy that got its calculations right (it is fairer that people on longer commutes pay more) but its politics wrong (two-thirds of commuters may pay less, but this does nothing to please the one-third - including students and the elderly - who have to pay more).

What does this mean for Singapore?

One: Politicians can no longer divorce politics from policies.

Purist policy wonks may wish that they can continue to craft the most rational and efficient policies in what was once termed 'pristine near-laboratory' conditions in Singapore.

But Singaporeans are no lab mice. Politicians make decisions for real people. Real life is messy, with individuals' unique situations sometimes making nonsense of policy rules. Politicians will thus have to spend time to listen to what people want and take on board their preferences before deciding. And then they have to spend yet more time to explain, convince and explain again the rationale behind policies and their trade-offs, including those that no one likes: potentially higher taxes, for example, to finance more help for the low and middle-income which so many vocal Singaporeans seem to want.

Politicians have to spend more time on politics and will have less time to spend on policy details.

Singapore ministers over the years may have got too much into the weeds of policymaking. They should leave it to the able mandarins in the civil service to consider the details, and focus on the direction of policies, how the policies will affect Singaporeans, and how to get buy-in for these decisions.

Second: Singaporeans must be prepared for a slower pace in decision-making if they desire more involvement. Consulting and refining policy take time.

They must understand that slower decisions can have a real economic cost, and so must be prepared either to accept that cost, or understand the need for some fleet-footed decisions.

Take one recent example. When Singapore's economy rebounded strongly after the global financial crisis, could the Government have afforded to spend six to 12 months consulting Singaporeans on whether to let in more foreigners to meet businesses' demand for labour? Surely not.

If the Government put as much emphasis on politics as on policies, they could have done better in going for a dual-track response. Open the doors but calibrate the inflow so they do not overload domestic infrastructure. Concurrently, explain to Singaporeans what is being done and why it is necessary, and take steps to alleviate the anticipated big squeeze.

The return of politics in Singapore means politicians have to once again remember to put people at the front and centre of their policies, and that it is bad politics to force people to accept policies.

In the wake of the election, PM Lee has indicated over the past few weeks that the PAP has grasped this. He has promised that his government will listen, even as he called on Singaporeans to come forth with 'ideas and energies, to join our minds, our hearts and our hands to create a better Singapore'.

It is a hopeful start.

xueying@sph.com.sg

Media biased, says one in two

May 24, 2011

ABOUT half of Singaporeans polled last year by the Institute of Policy Studies (IPS) were of the view that 'there is too much government control of newspapers and television'.

Younger respondents aged 21 to 39 years old agreed with the statement in larger numbers - over six in 10 - as compared to five in 10 of those aged over 60.

About 49 per cent of those aged below 60 agreed with the statement that 'newspapers and television are biased when they report on Singapore politics, political parties and elections', slightly higher than the 42 per cent among those aged 60 and above.

Despite these reservations, respondents still revealed above-average trust in newspapers, TV and radio.

Asked to measure the trustworthiness of media channels as outlets for political news from a scale of 1 (untrustworthy) to 5 (very trustworthy), newspapers received 3.58 on average, the highest.

TV received a 3.55 score, while the Internet received 2.82 on average.

Younger respondents were slightly more inclined to see the Internet as trustworthy. Mr Wong Liangyuan, 25, an undergraduate, describes himself as 'equally cynical and wary' of both mainstream and online media.

The mainstream media may display a bias towards the incumbent People's Action Party, but online sources display one towards opposition parties, he said. Hence, when consuming news online, he focuses on the facts and figures.

The IPS survey also showed that despite its perceived influence among the younger generation of Singaporeans, the penetration of online political content through the electorate as a whole is not overwhelming.

When asked if they have seen two specific instances of 'viral media', only about one in five said they had.

The two examples were popular blogger Mr Brown's 'bak chor mee' podcast mocking the PAP's handling of opposition candidate James Gomez in the 2006 General Election, and a Stomp video of beauty queen Ris Low discussing her fashion preferences.

Some 20 per cent had come across Mr Brown's podcast, while 25.6 per cent had seen the video of Ms Low.

RACHEL CHANG

Singaporeans value growth over freedom of speech: Poll

May 24, 2011
 
By Rachel Chang

A MAJORITY of Singaporeans prize economic growth over freedom of speech, but believe that there are too many political restrictions here, a new survey has found.

Most also agree that Singapore should have a powerful leader who can run the Government as he thinks fit, yet want everyone to be able to criticise the Government publicly.

The Institute of Policy Studies (IPS) polled 1,092 citizens aged 21 years and above in July and August last year and found a generation gap in political orientation.

Those aged below 40 displayed a more 'liberal' political attitude than those aged 40 to 59, who in turn were generally more liberal than those aged above 60.

The survey asked respondents to indicate their agreement, or lack thereof, regarding four statements.

Two were 'conservative' in nature: 'Singapore should have a powerful leader who can run the Government as he thinks fit', and 'It is more important to have good economic growth than freedom of speech'.

These are tenets which political watchers have attributed to the People's Action Party's mode of governance.

On these statements, seven out of 10 respondents said they 'agreed' or 'strongly agreed'.

The other two statements were 'liberal' in nature, invoking criticisms which have been levelled at the PAP Government: 'There are two many rules against participating in political activities in Singapore,' and 'Everyone should be given the freedom to criticise the Government publicly.'

Six out of 10 agreed or strongly agreed that there were too many rules; five out of 10 agreed or strongly agreed that everyone should be able to criticise the Government.

According to IPS senior research fellow Tan Tarn How, who led the study, a substantial segment of respondents agreed with both the liberal and conservative statements, despite the contradiction seemingly inherent in this.

The other two scholars involved in the study are from the communications and new media programme of the National University of Singapore: visiting fellow Chung Siyoung and assistant professor Zhang Weiyu.

Among those who want a strong leader, 62 per cent think there are too many rules against political participation.

Among those who say there are too many rules, 76 per cent want a strong leader. 'This shows, somewhat surprisingly, that Singaporeans show a desire not only for strong leadership and economic growth but also for more freedom to take part in politics,' the researchers noted.

Some Singaporeans, like entrepreneur Chong Wei Yong, 33, do not see this as contradictory. He said: 'With so much collective wealth, Singaporeans should now have a say in how it is managed.'

Dr Kenneth Paul Tan, associate professor at the Lee Kuan Yew School of Public Policy and visiting fellow at Harvard Kennedy School, noted that the statements are 'vague and contain too many ideas'.

He cautioned that the respondents may have been responding 'impressionistically' for the most part, and said that further questioning may have exposed flaws in their reasoning.

'I would be interested to know if the 60 per cent of respondents who agreed that there are too many rules can identify those rules, or if they know of anyone who has been prevented from engaging in political participation because of these rules,' he said.

Across the four statements, the younger the respondent group, the less conservative. Younger people were also more open about their political allegiances. When asked who they voted for in the 2006 General Election, only one in 10 refused to answer, in contrast to one in four in the older age groups.

As expected, younger people are more politically active online. A total of 25.5 per cent took part in activities like signing petitions and reading and writing about politics online, compared with 16.8 per cent of respondents altogether.

Mr Praveen Velu, 31, a National Solidarity Party volunteer, said the Internet has been a crucial tool for young activists: 'It's easier to exchange information, organise yourselves and find other like-minded people.'

rchang@sph.com.sg

Tuesday, May 24, 2011

New ministerial pay package "should also look at average man's pay"

By S Ramesh
24 May 2011

SINGAPORE: It may be a while before the committee set up to review salaries for political appointment holders completes its report, but views on the subject continue to be debated.

And political watchers in a radio discussion on Tuesday emphasised that any package proposed by the committee headed by Mr Gerard Ee must take into account what the average Singaporean earns.

The "Talkback" show on MediaCorp radio station 938Live saw three guests - former Nominated MP Gautam Banerjee and political commentators Eugene Tan and PN Balji - sharing their views on the topic of ministerial pay.

Mr Eugene Tan, an Assistant Professor of Law at Singapore Management University, said: "While we accept the principle behind a fair compensation package, the idea that ministers are paid way above the average Singaporean is something many Singaporeans have difficulty accepting."

However, it's argued that high salaries are not just a Singapore phenomenon.

Mr Gautam Banerjee, executive chairman of PricewaterhouseCoopers, said: "With globalisation and the companies getting larger, the salaries of the top individuals have increased disproportionately to the rest of the workforce. The formula has been giving these very large figures which the government has already brought down. They have never used the formula in its entirety because what the formula was throwing up was just too high a figure, just not tenable."

He added: "One of the things that people have always had with this formula is that you are always taking the highest of the high each year. You are always pegging yourself with the highest performers.

"You could do a number of things; you could take a broader number of people, you could take the highest individuals, you could take a medium of the top 50 and have something which you could sell politically, because at the end of the day, in the private sector it is also under a lot of review, especially after the financial crisis."

The review committee must also look long-term in order to attract the right talent.

Mr Eugene Tan said: "The committee has to balance the need to continue to attract talent within the ministerial ranks and at the same time come up with a set of recommendations which will have the 'buy-in' of the majority of Singaporeans.

"It is important for an issue like the ministerial salaries not to be excessively politicised. I don't think we can completely remove the political sting but it is important that it doesn't become an issue that takes away the moral legitimacy of the government.

"The whole process of looking at the ministerial salaries will be an important gauge of the new style of governance, reach out, engage and get Singaporeans to co-create. It will be an interesting process to watch.

"If the salary package is seen way too low, then I think it would be difficult. We must bear in mind that while serving in the Cabinet, taking part in politics is a calling, I am not so sure we should look at it as the politicians performing a public service close to volunteer service.


"It is important to recognise that the work they do serves a larger good and it is important we continue to attract good people."

Political watchers also do not rule out the possibility that in future, some top civil servants may indeed be paid more than their minister.

And they do not think the status of the president would be diminished if he is paid less than the prime minister.

Mr Gautam said: "You look at corporates, the chairman (who) is the most senior person in the organisation, is paid less than the CEO....The CEO carries a role....responsibility to perform and do more things and so the CEO's salary is more than the chairman. But the chairman gets the gravitas, the respect.

"(In Singapore), you still pay the president a salary, which is to commensurate with the position but it doesn't have to be the highest. And, also, the president is advised by a Council of Presidential Advisors and he has a good Council to advise him, he is not doing the job alone."

While the political watchers feel there should be public consultation on ministerial pay, they say mass feedback sessions could only lead to more noise and chatter. But they hope the review committee will be explicit with the principles it takes to arrive at its decision and also make public the final report.

- CNA/ir

Monday, May 23, 2011

Forget politics, what is the job worth?

May 23, 2011

by Tan Weizhen

SINGAPORE - Embarking on the very delicate task of reviewing ministerial salaries, one of the most politically controversial issues of the last 17 years, Mr Gerard Ee is determined to put aside all political lenses.

Let's view each ministerial job squarely for what it is - that is the approach that the chairman of the new salary review committee wants to take.

"We will start with a proper process. Forget the political part of the job, we will be redefining its worth by looking at everything else from the job scope to the hours put in," said Mr Ee. This task will "not be insurmountable" as it is what human resource practitioners do all the time.

The main challenge would be the next step: Applying a "significant discount" to comparable salaries in the private sector, that would signify the value and ethos of public service. This means "you can expect that, in all probability it will be a cut," said Mr Ee.

But, he asked: "How much should the discount be, and how do we come up with a figure that still ensures we have an honest and competent government? What will be fair to people?" These are questions that will always be debated as everyone will have a different view, he acknowledged.

At the end of the day, what matters is whether the committee's recommendations can be robustly defended, when people question if the job is really worth that much, said Mr Ee.

Yesterday, the eight-member panel that will review the salaries of the President, Prime Minister and political appointees was unveiled. The Government will base its new salaries - which will take effect from May 21, when the new Cabinet was sworn in - on the recommendations of these individuals from the private sector, social sector and labour movement.

Other points of reference it will take into account include general wage levels here. In other words, when the economy goes up or down, ministerial salaries should have a mechanism to reflect this.

Currently, the salaries are benchmarked to two-thirds of the median income of the top eight earners from six private-sector professions. The new model is very different altogether, Mr Ee noted: "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 work?'"

But some Members of Parliament who cut their teeth in the private sector think it would be tough to determine how much a minister should be paid based on his ministry's importance to the country or the size of his portfolio. Mr Zaqy Mohamad asked: "How do you decide which ministries are important or not? People will disagree."

MPs feel, however, that there are other pointers to take away from the corporate world - such as the practice of tagging pay and bonuses to the company's performance.

Mr Zaqy and Mr Inderjit Singh felt each minister's pay should be linked to the performance of their respective ministries, rather than merely to economic growth.

Said Mr Zaqy: "Of course, the salaries of overall ministers like the Prime Minister, and certain ministries like the Ministry of Trade and Industry, can be linked to GDP growth and other factors. But overall, link salaries to the ministry's performance. In the private sector, there is a strong link between salary benchmark, job scope and key performance indicators."

Headhunters note that in the private sector, top CEOs' salaries are wholly dependent on the company's performance. Mr Tim Hird, managing director of Robert Half, said: "Those further down the chain are paid according to a mix of individual and company performances. But the CEOs are there to increase the profitability of the business, and so they are rewarded according to how the company performs."

Determining how or whether such principles will apply to ministerial salaries is the job of the review committee, and looking at its members, Dr Gillian Koh of the Institute of Policy Studies said most would be "familiar with how the establishment functions". "Others, such as Mr George Quek (founder of BreadTalk) and Mr Wong Ngit Liong (Venture Corporation CEO) have an entrepreneurial background, and will know how the private sector functions."

Even so, Dr Koh added, this committee will "no doubt have to consult widely and include professionals that the ministerial salaries were previously benchmarked to".

Mr Ee said the committee would need to collect a lot of data and that it would not rush matters. Several times, he emphasised the principle of objectivity - be it in how he will go about the task or how he hopes the public would view the process.

In particular, he urged the public not to let emotional or personal associations get in the way when judging the results of the salary review. "I hope that the public don't associate any person with the job. If some dislike the minister, they may think he is overpaid but we should be reasonable. The system should be such that it reflects the value of the job."

[1 Pegging to the value of the ministry. Economic value? Then Minister for trade and industry, and perhaps finance and manpower should be paid most? Social value? Health, Housing and Education should be paid more? How to value social value? Political value? Community Development should not be valued if we see it as a political instrument to win votes for the govt? How to value defence?
 
2. Pegging to performance. Cyclical nature of economy means there will be booms and busts.In booms, GDP will grow as long as the govt does not do anything stupid. In busts, for an open economy like Sg, it would be impossible for Govt to prevent or isolate Sg from global cycles. In downturns the govt performance to be assessed is how the govt acted to provide relief, stimulate the economy, protect jobs, prevent unemployment, or raise employment. But again, these are hard KPIs that do not consider strategic consideration. Perhaps unemployment is as much due to a structural shift in economic activities. Subsidies, concessions and tax relief can hold companies here long after they have ceased to be viable businesses, in order to meet short term KPIs like low unemployment, but are merely postponing the day of reckoning.

How does one define the value of a new idea like "Jobs Credit"? Do we know how many jobs it saved?

3 Pegging to job scope and hours. Would like to see how this will be done.]

Sunday, May 22, 2011

Ministerial pay

May 22, 2011

Ministerial pay to be reviewed
Special committee will review basis and level of salaries, says PM Lee

By Lydia Lim

Ministers' salaries will be reviewed - that was the first dramatic change Prime Minister Lee Hsien Loong chose to announce last night after being sworn in for another five-year term.

National Kidney Foundation chairman Gerard Ee will be the head of a committee to review the basis and level of these salaries, PM Lee said in a speech at the Istana, after he and his new Cabinet were sworn in by President S R Nathan.

Mr Lee made clear that while the country would always need committed and capable ministers who should be paid properly, 'politics is not a job or a career promotion. It is a calling to serve the larger good of Singapore'.

He thereby signalled that he and his new team know that unhappiness over high ministerial pay must be addressed if they are to renew the compact between government and people.

Mr Ee told The Sunday Times that a guiding principle of the review that his committee will undertake would be the Prime Minister's point that holding political office is about serving the public.

'PM has said in his speech that salaries must reflect the values and ethos of public service. That means that whatever we work out, the final answer must include a substantial discount on comparable salaries in the private sector and people looking at it will say, 'these people are serving and making a sacrifice',' he said.

He said he expects his committee to do an in-depth study of comparable salaries in the private sector, and to factor in other points of reference, such as general wage levels.

They have been handed a very serious task, he said, as the issue of ministers' pay is very important and has the attention of the electorate.

'We must be seen to be very fair and transparent. We must be able to robustly defend our recommendations,' he said.

Education Minister Heng Swee Keat said he fully supports Mr Lee's decision to review political salaries, 'so that we get an agreement on this important national issue'.

The policy of pegging ministers' salaries to top private sector pay has been in place since 1994 but remains controversial and unpopular.

The current benchmark for ministers' pay is two-thirds of the median income of the top eight earners in six professions, including bankers and lawyers.

The Government does not disclose how much each minister is paid but the most current figures released by the Public Service Division show that the annual salary of an entry-grade minister was $1.57 million in 2009.

The Prime Minister's salary that year was $3.04 million.

During the recent election campaign, opposition politicians attacked ministers' salaries as being far removed from the wages of ordinary Singaporeans. The policy had also failed to achieve its aim of attracting top private sector talent into government, they said.

Yesterday, political observers and economists welcomed the announcement of the review. Former Nominated MP Siew Kum Hong said it showed that there truly 'are no sacred cows'.

Others suggested that ministers' pay be pegged more closely to median rather than top incomes.

In his speech, Mr Lee pledged that his Government would review both its politics and its policies so as to better work with Singaporeans to 'create a just and fair society', a phrase the PAP used at its founding in 1954.

He spoke of renewal in three ways. First, a renewal of leadership to lead Singapore in a new phase of development.

Mr Lee has named a younger team to the Cabinet, and appointed four first-term Members of Parliament to the positions of minister and minister of state.

Second, a renewal in the Government's approach to policies, including a rethink of what is necessary and best for Singapore's future. 'Though Singaporeans trust that our policies are mostly sound, nothing should be sacrosanct,' he said.

The third renewal is of the values at the heart of government and society. Mr Lee pledged to work with Singaporeans to create a society which gives all citizens the best start in life, and leaves no one behind.

'A Singapore which excites our young and respects our old. A society that nurtures and inspires the human spirit, beyond material success,' he said.

lydia@sph.com.sg


Ministerial salaries: A short history


By Rachel Chang

It has been an albatross around the Government's neck since the policy pegging ministerial pay to the private sector was first implemented in the mid-1990s.

The issue of ministerial pay first surfaced in 1972 and has remained controversial since. In 1985, then Prime Minister Lee Kuan Yew told Parliament that he had been a 'kept man' in all his years in public service.

His pay as PM was much less than what his brother and wife, both lawyers, were earning in private practice, he said. He himself would have earned as much if he had not gone into public service.

But it was only nine years later that the idea of finding a formula to peg ministerial salaries to private sector pay began gathering speed.

In January 1994, then Senior Minister Lee said such a formula would 'remove the need to justify pay revisions every few years as adjustments based on income tax figures could be made automatically each year'.

In October that year, a White Paper on Competitive Salaries for Competent and Honest Government was endorsed by Parliament after an intense three-day debate.

The benchmark at which a junior minister's salary would be set was two-thirds the average principal income of the top four earners in six professions: banking, accountancy, engineering, law, managing local manufacturing companies and managing multinational corporations.

The one-third discount was meant to be a 'visible demonstration of the sacrifice' entailed in becoming a minister.

Passionately imploring Singaporeans to support the benchmark, then Prime Minister Goh Chok Tong told Parliament: 'It will be penny wise and pound foolish if you deny me the means to get the best people in government.'

After the White Paper was endorsed by Parliament, an independent panel set the Prime Minister's pay at twice that of the most junior minister. Mr Goh was to be paid about $1.5 million.

But if Mr Lee had thought a benchmark would negate the necessity of the Government periodically justifying ministerial pay rises, he was disappointed. The benchmark itself threw up a different set of problems.

It was the target of much public confusion and ire, little of which was defused by the Government's continued defence of the policy - such as Mr Lee's 1996 speech to unionists complete with figures from the Inland Revenue Authority of Singapore showing what the top earners in the private sectors made.

Another headache for the Government: the difficulty of keeping ministerial pay pegged to the benchmark.

For example, while top private sector earners saw their incomes rise right through the 1990s, the 1997-1998 Asian financial crisis saw the Public Service Division freeze pay increases in the public sector.

As then Deputy Prime Minister Lee Hsien Loong noted in April 2000: 'Workers' wages fell across the board in 1997 and 1998. At the top, we expected incomes also to fall, after a delay.

'But this did not happen. To our surprise, the civil service benchmarks rose steadily throughout the crisis.'

This was because even during a recession, there would be people in the private sector who would do well. The people whose salaries were reflected in the benchmarks differed from year to year.

Although the benchmarks might call for ministers' salaries to be raised, the political cost of doing so while workers' incomes fell was seen as too heavy. And so ministers often took pay cuts during economic crises.

By 2000, ministerial salaries were at only 70 per cent of the benchmark.

That year, Parliament debated the Government's intention to raise them to 80 per cent, and then to 100 per cent over three years.

The benchmark was also tweaked, in response to criticism that its methodology skewed upwards. It would now be two-thirds of the median income of the top eight earners in six professions, as opposed to two-thirds of the average income of the top four earners previously.

By including a broader sample, it would be more representative. Also, only 50 per cent of the stock options awarded to the top earners would be taken into account in calculating the benchmark , as the options were often outsized.

But the move to have ministerial pay cleave more to the benchmark was quickly stymied again - by the crises following the Sept 11, 2001 attacks on the United States, and the outbreak of Sars in 2003.

With the economy in the doldrums, ministers took pay cuts rather than following the benchmark upwards.

As a result, by 2007, the gap had again grown: Ministerial pay was at only 55 per cent of the benchmark.

The debate that followed over the move to bring pay to 70 per cent of the benchmark was heated and acrimonious.

Workers' Party chairman Sylvia Lim said in Parliament that the average worker's monthly wage would be earned by ministers in two to three hours.

'Does the Cabinet not feel a tinge of discomfort in drawing taxpayers' money at such a rate?' she asked.

Then Minister Mentor Lee Kuan Yew rose to defend the policy, arguing that high salaries had kept the country's governance top-notch and uncorrupt for 50 years.

He painted a picture of what might happen if Singapore had sub-par ministers because it refused to pay for top talent:

'Your apartment will be worth a fraction of what it is. Your jobs will be in peril, your security will be at risk and our women will become maids in other people's countries.'

As a result of the revisions in 2007, Prime Minister Lee Hsien Loong's pay increased from $2.5 million to $3.1 million.

He said he would donate his increase to charity over the next five years.

At the end of last year, ministerial salaries stood at about 70 per cent of the benchmark, after planned increments were deferred due to the 2009 financial crisis.



Deciding ministerial pay will be tough

By Chua Mui Hoong

When People's Action Party (PAP) leaders started talking about change, promising to listen to people's concerns and review policies, my first reaction was: Would they bite the bullet and review ministerial pay?

I wasn't the only Singaporean who wondered, judging from letters to The Straits Times Forum page and online blogs.

The issue of high pay for ministers has become so contentious that it is like a wound in the body politic.

It did not begin that way. In fact, the idea to have a formula to peg the pay of political office-holders to top corporate chiefs' pay was meant to remove the issue's political sting. Establish a formula, peg ministers' pay to it, and voila - you get a workable method to determine how much ministers should be paid. The aim was to establish a salary level high enough so the very able will not be required to accept a drastic fall in lifestyle as a result of entering politics, but not so high that it becomes an inducement in itself.

That, at least, was the theory.

In the 17 years since the formula has been in place, the result has been the reverse. Ministers' high pay has been criticised and debated extensively in Parliament - but always with the PAP defending the principle, arguing that it was necessary to pay top dollar to attract talent into the political ranks.

And yet, last night, Prime Minister Lee Hsien Loong chose to announce a review of political salaries at the swearing-in of his new Cabinet: 'One important area for review is political salaries. We will always need committed and capable ministers. Politics is not a job or a career promotion. It is a calling to serve the larger good of Singapore. But ministers should also be paid properly in order that Singapore can have honest, competent leadership over the long term.

'I know that Singaporeans have genuine concerns over the present salaries. Hence I am appointing a committee to review the basis and level of political salaries. The committee will be chaired by Mr Gerard Ee, chairman of Changi General Hospital and chairman of NKF (National Kidney Foundation).'

The review is very welcome. Coming after a decisive change in the Cabinet line-up, it signals the PAP's intent to act on its election promise of change.

But the hard work lies ahead. To be credible, the committee must consist of non-partisan, independent-minded people. Mr Ee, a social service veteran and trusted accountant, is a good choice as chair.

It is a cardinal principle that those who stand to benefit should not be involved in setting their own pay. Hence, the other members of the committee should not come from the ranks of political office-holders, or indeed from the civil service.

The committee's terms of reference should also be made clear, both so that it can do its work properly, and also so that Singaporeans' expectations are set right.

It should be wide enough to allow the committee free range to do what it believes is right for Singapore - balancing the need to pay ministers properly, as the PM put it, but not erode their standing in the public eye as public servants who have answered the call of duty to serve their country.

What has changed to induce PM Lee to announce a review of a pay formula that all three of Singapore's Prime Ministers - Mr Lee Kuan Yew, Mr Goh Chok Tong and the incumbent - have so stoutly defended?

We can only speculate, but the following are possible reasons:

First, the formula's failure to fulfil the objective of attracting private sector talent. In the last Cabinet, seven out of 18 ministers sworn in were from the private sector. At last night's swearing-in, only Foreign and Law Minister K. Shanmugam (former litigator) and Defence Minister Ng Eng Hen (former surgeon) among the 14 full ministers are from the private sector. The rest are from the public sector, the military or academia, although a few, like Mr Gan Kim Yong and Mr S. Iswaran, were in private sector jobs before holding political office.

The entry of high-earning, high-flying professionals like Mr Chen Show Mao into opposition politics - without the lure of multi-million-dollar salaries - also discredited the PAP's argument in the public eye.

Second, the depth of resentment over the issue has intensified
. Such feelings are impossible to quantify, but any trawl of online forums or coffee shop talk will suggest that high ministerial pay is the No. 1 pet hate of many Singaporeans. To be sure, unhappiness at this policy has been present from the outset, but it has been more recently amplified by social media online.

As many have noted, the issue has become the distorting lens through which many ordinary Singaporeans view the PAP government, and indeed all political matters. It eroded the moral high-ground the PAP occupied as a result of having provided decades of good government and the considerable personal sacrifice of its founders, and introduced a transactional tone into the people-government relationship: We pay top dollar, you deliver or get out.

Third, as some senior government figures have acknowledged privately, the current formula is flawed.

It is counter-cyclical because of the time-lag in getting income data. In a recession, the benchmark may go up as it is based on income from one or two years ago. But raising ministers' pay in a recession would be political suicide. Result: Actual pay given to ministers was typically 50 to 70 per cent of the benchmark for years. This creates a rather absurd effect of the PAP getting flak for very high salaries it deems politically untenable to pay to its ministers.

The formula is also flawed because it is pegged to outliers - the top eight earners in six professions. As many have noted, a windfall pay packet, say, or a once-in-a-lifetime deal, can propel someone into that top spot. But the next year, his pay may plunge.

The minister's pay however, always remains at that level, for it is pegged to the top earners, whoever they might be, every year. It is like striking lottery every year, the critics noted.

The review committee has to decide if a formula is a good way to determine political salaries. If yes, it should relook the current formula, and consider alternatives, such as linking it to median income.

Two things are certain about the committee's recommendations: it will result in lower political salaries. And whatever method it proposes will continue to be controversial.

But if the composition of the committee is right, it will have one strong plus factor: ministerial pay would have been determined by a committee of neutral people who do not benefit from it. That alone would make the entire review worthwhile.

muihoong@sph.com.sg