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How to depoliticise the S$50m? Solutions?
WP has declared in Parliament that they can do the job for half the amount, S$25m.
Will 25 be better than 50 in reducing the political pressure by half?
Will reducing it to zero mean that there will be no political pressure, and zero responsibilities politically?
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Depoliticise high pay of ministers and mayors. Total S$50m. How? WP said in Parliament they can do the job for S$25m.
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PAYROLL TAX FUND – FOR MINISTERS’ SALARIES
Should we bring back the payroll tax to provide the resources to set up a Payroll Fund to pay the salaries of Cabinet ministers?
This will quell the disquiet of paying ministers with tax paid by the hoi-polloi.
The Payroll Fund should be from payroll tax on companies charged on the total emoluments of the top executives in the private sector.
The payroll tax shall be paid by the companies and not personal income tax collection from individuals to pay the ministers.
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Salaries of president, PM, MPs, etc. from May 2011; and 2017; and up for 5-yearly review;
Source: https://www.psd.gov.sg/faq/?fbclid=IwAR0f98Zsj4_o7D_5aqGBdD75jt8VQbzToQW_93xpzRYplYk-ZP1K3-D0qwQ
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THE SINGAPORE ADMINISTRATIVE SERVICE
Who are the Senior Public Service Leadership (SPSL) appointment holders?
SPSL appointments include positions like Permanent Secretaries, Deputy Secretaries, Chief Executive Officers of major statutory boards, and key Department Heads. SPSL appointment holders can be Administrative Officers (AO) as well as professional officers from Ministries or Statutory Boards.
What is the role of an Administrative Officer?
Administrative Officers (AOs) are officers who are experts in the business of government. As leaders and managers in the public sector, AOs play a key role in the development and implementation of national policies, as guided by the elected government. AOs prepare ahead for the future, anticipate and analyse problems, and contribute to the survival, security and success of Singapore.
What are my development opportunities as an Administrative Officer (AO)?
AOs are tested regularly in different domains in the public sector, to stretch them and equip them with the necessary instincts and skills for public sector leadership. In addition, some AOs are assigned to ground postings in Community Development Councils and private sector companies, to learn from and contribute to these organisations.
Who selects Administrative Officers? How do I apply to join the Administrative Service?
The Public Service Commission selects and appoints the Administrative Officers. You can apply to join the Administrative Service if you have an outstanding career history, a proven track record of leadership qualities and the desire to contribute to the nation. You should also be a Singapore Citizen or be willing to take up citizenship.
Read on for more details about Public Service Leadership Careers.
PUBLIC SERVICE LEADERSHIP PROGRAMME
What is the duration of the Public Service Leadership Programme (PSLP)?
The PSLP is a long-term leadership development programme that aims to develop capable officers to take on key Public Service Leadership positions.
Entry to the programme can be at any juncture, where there will be a variety of career pathways to cater to the officers’ inclinations.
Who is the PSLP managed by?
The PSLP is centrally managed by the Public Service Division to groom capable and talented individuals for leadership positions within the Public Service.
Can I choose the agencies of the two sectors I am posted to during the General Phase of the PSLP?
During the selection interview, you may like to share with us your career inclinations and your preferred posting sectors. These, together with other considerations such as availability of suitable positions, will form the basis for your eventual posting.
Who oversees the career paths of officers on the PSLP?
The career paths of officers on the Sectoral Phase of the PSLP are overseen and managed by senior Public Service leaders in the respective sectors, supported by the Public Service Division. As the needs of each sector may differ from the others, the senior leaders in each sector will identify the capability and competency needs as well as put in place developmental initiatives required for each sector.
What are the requirements for me to remain in the PSLP?
You will remain on the PSLP as long as you perform on the job and exhibit the potential to eventually take on key Public Service Leadership positions in the sectors.
Is there a bond for the PSLP?
There is generally no bond for the programme. However, if you are sponsored for post-graduate studies while on the programme, you may be required to serve a bond period.
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REMUNERATION FOR MINISTERS AND MEMBERS OF PARLIAMENT
Background
What is the review on ministerial salaries about?
In his swearing-in speech on 21 May 2011 after the General Election, the Prime Minister acknowledged that Singaporeans had genuine concerns over the present salaries of their leaders. At the same time, Ministers should be paid properly so that Singapore will have capable and committed leadership over the long term. Thus, the Prime Minister appointed a committee chaired by Mr Gerard Ee to review the basis and level of salaries for the President, Prime Minister, political appointment holders and Members of Parliaments to ensure that the salary framework will remain relevant for the future.
The Committee completed its review and submitted its report to the Prime Minister on 30 December 2011. The Government considered the report carefully and agreed with the key principles and approach adopted by the Committee. The report was converted into a White Paper, “Salaries for A Capable and Committed Government”. Parliament endorsed the White Paper after three days of debate from 16 to 18 January 2012. As committed by the Prime Minister in his swearing-in speech, the revised salaries took effect from 21 May 2011.
In 2017, the Prime Minister formed a new independent Committee to review the salary framework to ensure that it remained appropriate and valid. The 2017 Committee affirmed that the current salary framework remains relevant.
Will there be any further reviews to the salary framework and by whom?
The Prime Minister will appoint a Committee to carry out regular reviews every five years to ensure that the salary framework remains relevant.
Remuneration of Ministers
What is the benchmark used to determine political salaries?
The benchmark for an entry-level MR4 Minister is based on the median income of the top 1,000 Singapore citizens income earners, with a 40% discount to reflect the ethos of political service.
The salaries of other political appointment holders will be determined based on their salary ratios to MR4. The salary ratios reflect the roles and responsibilities of the different political appointment holders. For example, the Prime Minister who is the head of the Executive will earn 2 times the salary of an MR4 Minister.
The salaries of political appointment holders will be adjusted according to the movement of the benchmark as it responds to market conditions.
Why benchmark to the top 1,000 Singapore Citizens income earners?
It is important to note that when considering potential candidates to take up political office, the first quality that the Government looks out for is a sense of public service. The Government looks for people who have their heart in the right place, who can empathise with Singaporeans from all walks of life, who want to contribute to the betterment of our Singapore and Singaporeans. This has been, and should always be, the important basic requirement for any Member of Parliament or Minister.
But having a passion for public service is not in itself sufficient to run a country well. The Government therefore wants people who not only have a sense of public service, but also have many other qualities: organisational and leadership capabilities, capacity to handle multiple responsibilities, ability to solve problems and take charge in a crisis, and the ability to hold his own with world leaders and further Singapore’s interests.
It does not mean that only people who are among the top 1,000 earners would meet all these criteria, or that the Government will only draw from this pool. Indeed, many top earners have the competencies but not the sense of public mission. But looking at the responsibilities of the jobs that these 1,000 hold, this is a reasonable level that reflects the quality and abilities of people that Singapore seeks to bring in as Ministers for continued good government.
Who are these people in the top 1,000 income earners list?
The top 1,000 Singapore citizen income earners would include the following:
1. Senior management positions including Chief Executive Officers, Chief Operating Officers, Chief Financial Officers, Chief Information Officers, Presidents, Chairmen, Directors, General Managers from a range of industries;
2. Representatives from the financial services including bankers, asset managers, traders, Managing Directors, Senior Vice Presidents; and
3. Professionals including lawyers, accountants, doctors, engineers.
What does the Ministerial salary framework consist of?
The salary formula features fixed and variable pay components which are linked to individual performance and national outcomes, i.e.
Annual Salary = Fixed (13 months)
+ Annual Variable Component (typically 1 month)
+ Individual Performance Bonus (3 months for good performance)
+ National Bonus (3 months if targets are met)
= 20 months.
A Minister may start at the lower end of the MR4 range with a monthly salary of $46,750. This works out to an annual salary of $935,000, of which $607,750 is fixed and the rest is variable.
As at 2012, when the Ministerial salaries were last adjusted, the monthly salary at benchmark level is $55,000, which works out to an annual salary of $1,100,000. The fixed salary is $715,000 and the rest is variable.
The salaries of the appointment holders are performance-linked, to ensure that the leaders are accountable for their roles and responsibilities. The salaries are also linked to the socio-economic outcomes of Singaporeans.
Why have salary ranges? What are the grades and salary ranges?
Consistent with HR practice in both the Singapore public and private sectors, each grade has a salary range to accommodate different monthly salaries. The salary range system for Deputy Prime Ministers, Ministers and other political appointment holders gives the Prime Minister the flexibility to adjust their salaries when necessary. This also provides for the award of increments so that political appointment holders do not need to be promoted to the next grade in order to get a salary adjustment.
The monthly salary of each grade has a range of 0.9 to 1.1 of the mid-point of that range, except for the starting point of the entry level MR4 Minister which is lower at 0.85 of the reference monthly salary. A Minister on the starting point of the MR4 salary range would therefore have 13 months of fixed salary amounting to $607,750. This represents the basic annual salary, without bonuses, which a Minister at the start point of the grade would earn. With variable bonuses in a typical year, this would come up to a total of $935,000.
Do political appointment holders get more than one pay for more than one portfolio?
The current practice of paying a political appointment holder only one pay package regardless of the number of appointments held will be retained.
Remuneration of the Prime Minister, the President, the Speaker and Deputy Speaker
What is the Prime Minister’s annual salary? What are the components?
The Prime Minister receives a total annual salary package (inclusive of 13th month bonus, Annual Variable Component and National Bonus) that is twice the MR4 benchmark, or $2.2m, which represents a reduction of 36% from 2010 levels. As there is no one to decide on the annual performance bonus for the PM, the PM’s bonus will be based only on the National Bonus.
Pensions for political appointment holders, including the Prime Minister, have been removed with effect from 21 May 2011.
The Prime Minister is on the Medisave-cum-Subsidised Outpatient (MSO) scheme. He is accorded the use of an official car that is subject to tax, and receives no perks.
What is the President’s annual salary? What are the components?
The President is Head of State and has significant custodial powers. However, unlike the Prime Minister, he/she does not set national policies and does not have direct executive responsibility for governing the country, except as it relates to his/her custodial role.
The President is paid the same monthly salary as the Prime Minister, with 13th month bonus and AVC, but without the Performance Bonus and National Bonus. This gives a salary of $1.54m, which represents a reduction of 51% from 2010 levels.
The possibility of a pension for the President was previously provided for under the Civil List and Pension Act. This provision has never been exercised and no President has ever received a State pension. This provision has been removed for the President, in line with the removal of pensions for political appointment holders.
The President is on the Medisave-cum-Subsidised Outpatient (MSO) scheme. He/She is accorded the use of an official car that is subject to tax, and receive no perks.
What is the Speaker’s annual salary? What is the Deputy Speaker’s annual allowance? What are the components?
The salary of a full-time Speaker is pegged to the MR4 benchmark and structured as a 14-month package, i.e. it includes the 13th month bonus and Annual Variable Component (AVC) but excludes Performance Bonus and National Bonus. The allowance of a full-time Deputy Speaker is pegged to 15% of a full-time Speaker.
Parliament currently applies a 50% discount to both positions as they are not full-time positions. This means that the Speaker’s annual salary package will be $550,000, a 53% cut from the 2010 salary, while the annual allowance of the Deputy Speaker will be $82,500, a 15% drop from the 2010 allowance.
The pension scheme has been removed for the Speaker with effect from 21 May 2011.
The Speaker and the Deputy Speaker are on the Medisave-cum-Subsidised Outpatient (MSO) scheme and receive no perks. The Speaker is accorded the use of an official car that is subject to tax.
Allowance for Members of Parliament
What is a Member of Parliament (MP)’s annual allowance? What are the components? What about Non-Constituency MPs (NCMPs)/ Nominated MPs (NMPs)?
MPs are paid an allowance for the time and expenses incurred in serving in that capacity. Our MPs serve dual roles – they have a community-based role, i.e. looking after the needs of their constituents and raising their concerns in Parliament, and also a legislative role in Parliament where they can influence decisions on Government budgets, and enact or amend legislation, including the Constitution.
As MPs play a political role, their allowance should be pegged to that of the political appointment holders. But since MPs do not have an executive role, MPs are given only a monthly allowance, a 13th month bonus and AVC. Hence, an MP’s annual allowance is 17.5% of the MR4 benchmark, i.e. a drop of 3% from the 2010 allowance. The annual MP allowance is $192,500.
Prior to 21 May 2011, only MPs elected before 1995 were eligible for pension. However, just like the political appointment holders, the pensions of these MPs have been frozen as at 20 May 2011. They will receive the frozen pension when they step down from their MP positions.
NCMPs and NMPs have smaller roles than MPs. They do not have a community role as they do not have constituents. Hence the annual allowance of an NCMP / NMP is pegged to 15% of the MP’s annual allowance. An NCMP/NMP’s annual allowance is $28,900, which is a drop of about 4% from the 2010 allowance.
MPs are on the Medisave-cum-Subsidised Outpatient (MSO) scheme. There are no other perks.
Why do political appointment holders also get MP allowance?
As is international practice in Westminster Parliamentary systems, all political appointment holders will also receive MP allowances as they have the dual roles of being MPs which involve looking after the needs of their constituents and raising their concerns in Parliament.
Bonus
What is Performance Bonus and who determines the quantum?
The salary framework provides for a Performance Bonus which reflects a political appointment holder’s work in leading a Ministry or helming a portfolio, as well as contributions at Whole-of-Government level.
The performance bonuses for Ministers are determined by the Prime Minister, based on his assessment of the appointment holder’s performance in his immediate portfolio, as well as wider contributions at a Whole-of-Government level.
What is National Bonus and why should we have it? Why not have deferred payments for National Bonus since results of policies take time to be seen?
The National Bonus replaces the GDP Bonus as a direct link to the socio-economic outcomes of Singaporeans and includes indicators beyond GDP growth.
The National Bonus has four socio-economic indicators with equal weightage (25%), namely, (i) real median income growth rate of the average Singaporean, (ii) real income growth rate of the lowest 20th percentile of Singaporean income earners and (iii) unemployment rate of Singaporeans, and (iv) real GDP growth rate. These indicators have a strong link to the social-economic progress of average and lower income Singapore Citizens.
Deferred payments for the National Bonus component of the annual salaries were not adopted as this would remove the direct link to actual performance in any one year.
Medical Benefits
What are the medical/dental benefits for Ministers?
Ministers were moved onto the Medisave-cum-Subsidised Outpatient (MSO) scheme in 1994. Currently, officers on the MSO scheme get a 2% Medisave contribution capped at $2,380 per year, on top of their normal statutory Medisave contributions. This can then be used to buy MediShield Life or other portable Medisave-approved insurance plans (i.e. Integrated Shield Plans) to cover their inpatient needs.
The MSO scheme also provides a subsidy of up to $500 per year for outpatient treatment. There is also a subsidy for dental treatment capped at $120 per year.
The MSO scheme was last reviewed in 2015.
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ABOUT THE SINGAPORE PUBLIC SERVICE
What is the difference between Ministries and Statutory Boards? Are statutory boards considered part of the Singapore Civil Service?
The Singapore Public Service employs about 150,000 public officers working in 16 Ministries and more than 50 Statutory Boards. Within the Public Service is the Civil Service, comprising about 86,000 officers working in the Ministries.
They work in various schemes of service, including the Administrative Service, legal, education, police, civil defence and accounting schemes. Statutory boards (such as HDB, CPF Board, IRAS, etc) have their own recruitment and human resource management practices. They are legally distinct employers from the Civil Service.
If you would like to find out more about the various statutory boards in Singapore, you can access their websites for details.
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High pay of ministers and mayors… Solutions?
Some will say let them beg for public donations to pay their salaries.
If less donations, there will be less pay for them.
Total S$50m per year to pay them. Some say pay them zero, and give the S$50m to the poor.
S$50m to 250,000 poor = $200 per person.
Will it make the poor super happy with S$200 each when some even bet more than S$20 per month at the 4D booths?
What are the other solutions to depoliticise the pay of ministers and mayors, total pay of S$50m?
Money does not grow on trees.
Can the PLCs afford S$50m?
Each PLC to pay up to S$100,000 and with tax rebates or lower corporate tax to cushion it? How?
Bring back the payroll tax on PLCs to pay for it and cap at S$100,000 per PLC.
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WP said in Parliament that they can do the job at half price, S$25m.
Do the WP MPs know how much is it per day at half price, and how much the cleaner earns a month in comparison?
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Possible solutions? Impossible?
Does the PAP Govt have the political will?
More on this at this link:
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Bring back the payroll tax. Tax it on PLCs only. Not on SMEs.
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Payroll tax at 1% on PLCs….. but does the PAP Govt have the political will to pay the S$50m not from the consolidated fund or general taxes, but from a 1% payroll tax on PLCs to depoliticise the S$50m?
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High pay of ministers comes with greater responsibilities and a low moral authority when it comes to addressing the plight of the lower-income groups, the Minimum Wage policy, and income and wealth inequality.
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The low moral authority also applies whenever there is public outcry over government policies, government spending, and any setback in public service level and efficiency.
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Many learned people and those living to the nines are driven by their socialist idealism and their altruistic love for the down trodden to do their best with moral authority to champion the cause of the poor. The reality is that do they know what is Equality in Inequality?
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I suggested the following in my 2017 Budget wish list.
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The Budget will be presented by Minister for Finance Heng Swee Kiat on 20th Feb 2017. This will be his 2nd Budget, the first was the 2016 Budget.
“Using general taxation from the general public is not the solution to pay ministers’ salaries.
So long as ministers’ salaries are paid from general taxation, the demagogues and critics will continue to curse it day and night. High pay comes with high expectations but the threshold in moral authority to govern is low when there is public outcry over policies and lapses in governing.
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I suggested:
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Pay MPs’ allowances and ministers’ salaries by having a 1% payroll tax payable by public-listed companies on their total annual group payroll, which should be capped at a level, say not exceeding $10m.
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Maximum payroll tax shall be capped at $100,000 payable by each PLC. [i.e. 1% on maximum of S$10m].
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The expected total payroll tax collection will not exceed S$50m.
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It is time to counter the demagogues’s fixation on stirring up public discontent on ministers’ salaries as they know that higher pay comes with higher responsibility and expectations.
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They know it will be hard to justify when there is public outcry on issues that affect a big section of the population.”
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.Ho Ching wrote on on Facebook on 21st August 2019:
I have no view one way or other about who deserves what.
I have however, one view about tables of comparison like the one given in the article.
One big difference is the clean wage system in SG – ie no other perks in kind during office, and no pensions or other benefits after leaving office in SG.
In most, if not all, other countries, they would have many other perks during term of office, like butlers and hairdressers, free flights on national airlines, even family holidays, etc; and quite a number like the USA would include perks after end of term of office.
I do have one more view about pay for public service, whether for political office or “do good” areas like social services.
When we look for people, whether for public service or social services like helping the poor, the disabled or the disadvantaged, we need to have those with the right heart of passion and commitment, and the right hand of skills, knowledge and capabilities, and the right head of wisdom and understanding of long term effects and sustainable systems.
Having have these qualities of excellence, we must not take advantage of them to underpay, or require them to wear hair-suits for a show of sainthood.
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Why Is The Salary Of Singapore’s Prime Minister So High?
24th July 2019 in blog.seedly.sg
Is Singapore’s Prime Minister Really Overpaid?
We just celebrated Singapore’s 54th National Day.
And considering that it is our Bicentennial Year, we thought it might be interesting to revisit the growth we’ve accomplished since achieving Independence in 1965 and to address a commonly debated topic by most Singaporeans as well.
In this article, we’ll be presenting the facts, figures, and statistics of Singapore, one of the world’s fastest-growing economies vs the economies of five other countries.
Using that data, we’ll also be comparing the compensation package of Singapore’s leader vs. that of the leaders from the five selected countries to find out if Singapore’s Prime Minister is really overpaid or not.
Disclaimer: We have no political affiliations and just want to put to rest the rumours and questions that are swirling around the internet through good ol’ fashion research and the use of facts and figures from official sources.
TL;DR: A Top-Performing CEO Should Command Top-Dollar For His Or Her Work
- The Singapore Prime Minister is earning $2.2 Million a year (including bonuses)
- The norm salary is set at two times that of an MR4 Minister (an entry-level minister in Singapore)
- The Prime Minister does not receive a Performance Bonus as there is no one to assess his performance annually, however, he still receives the National Bonus
- Since 1960, the GDP per capita of Singapore has grown the most across the countries we compared: 133 times to around $57,714 per capita in 2017, compared to 42 times (Malaysia), 107 times (Hong Kong), 98 times (China), 19 times (USA) and 28 times (UK)
- Since 1960, the Population of Singapore has grown the second fastest across the various countries we compared: 3.4 times compared to 3.8 times (Malaysia), 2.4 times (Hong Kong), 1.9 times (China), 1.8 times (USA) and 1.25 times (UK). But in terms of actual figures, we are the smallest in population size at 5.6 Million.
- The Singapore Prime Minister earns almost 2 times more than his counterpart in Hong Kong, who comes in second place.
- In comparison, some top CEOs earn at least 3 times more: DBS CEO Piyush Gupta earned $11.9M in 2018, CityDev CEO Kwek Leng Beng and UOB CEO Wee Ee Cheong are both tied at $8.9M each.
Singapore vs Malaysia vs Hong Kong vs China vs USA vs UK
Here are the other five countries which we selected for this comparison.
You’ll notice that they range from local neighbours to Asian rivals, to global benchmarks:
- Malaysia: Singapore’s closest geographical neighbour
- Hong Kong: One of the Asian tigers, and also another strong financial hub in Asia
- China: A developing/developed country with a massive economy and population, that has plenty of room to grow
- USA: An established leading economy and also known to be a Big Brother to many countries across the world
- UK: One of the earliest and strongest economies, which has strong ties with Singapore before the 1960s
“If you pay peanuts, do you get monkeys?”
And here are the leaders of the various countries we selected, whose salaries we listed:
- Singapore Prime Minister (Lee Hsien Loong)
- Malaysia Prime Minister (Mahathir Mohamad)
- Hong Kong Chief Executive (Carrie Lam)
- China President (Xi Jinping)
- USA President (Donald Trump)
- UK Prime Minister (Boris Johnson)
If you’re curious as to where we got the salaries from, they can be easily found on the country’s respective government websites (SG, MY, HK, China, USA, UK) as well as through various official news sources.
For the sake of this comparison, all annual salaries were converted to SGD$ at exchange rates which are correct as of 24 July 2019.
And just to give you a better feel of the scale of responsibility of each leader, we chose the following variables:
- GDP per capita (and growth)
- Population
in order to see how the respective country’s economy has progressed vs. its population growth under the charge of the respective country’s leader.
Note: the variables are pegged to the position and not necessarily the current leader who is the incumbent
GDP Per Capita Comparison:
What: GDP per capita is product divided by mid-year population. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. Data are in current U.S. dollars.
Why: It gives a good indication of how the economies have been growing by taking the overall economy value that has been created by the country over it’s population figures.
Findings: Singapore’s GDP per capita is ranked top 3 in the world, which is a massive feat, surging ahead many other countries since independence.
Population Comparison:
What: Midyear estimates of the resident population.
Why: It gives a good indication of what kind of beasts these leaders have to tame and manage. It is also a good indication of the income taxpayers who contribute to the country’s national reserves.
Findings: For sake of the graph visualisation below, I have removed China (1.3 Billion) and USA (325 Million) so you can observe the differences between the other 4 countries. It is pretty obvious that Singapore (5.6 Million) has the smallest population, even compared with Hong Kong (7.4 Million). This indicates a smaller population and taxpayer base.
However, it is noted that we are the second fastest-growing population if you measure by growth % at over 3.4 times over the last 50 odd years.
LKY: Higher Pay Will Attract A Talented Team So The Country Can Prosper
In 1994 LKY shared a now-famous parliament speech on Minister salaries which rings true till today. Here is the gist of it:
“Sir, my generation of political leaders have become dinosaurs, an extinct breed of men who went into politics because of the passion of their convictions.
Let me explain very simply, Mr Speaker, that MPs are real men and women, just like you and me, with real families who have real aspirations in life. So when we talk of all these highfalutin, noble, lofty causes, remember at the end of the day, very few people become priests.”
How Is A Singapore Minister’s Salary Calculated?
As with any organisation or Multinational Corporation (MNC), the Salary structure of Ministers are modelled closely.
There is actually a 50 page white paper by the Public Service Division (PSD) detailing the full rationale of the compensation packages.
A Singapore Minister’s salary is made up of a fixed component and a variable one.
| Minister’s Annual Salary | |
|---|---|
Fixed Component |
Monthly Pay |
| 13th Month Bonus | |
Variable Pay |
Performance Bonus
(Determined by the Prime Minister) |
| Annual Variable Component
(Based on Singapore’s economic performance) |
|
| National Bonus
(Based on the real median income growth rate, real growth rate of lowest 20th percentile income, unemployment rate and real GDP growth rate) |
|
However, for the Prime Minister, he does not receive a Performance bonus because there is no one to assess his performance annually. Instead, the PM’s salary is tied to twice the MR4 minister’s salary = 1.1M x 2
In fact, after some debates, there was a revision in salaries from 2010, which was also detailed here.
The breakdown can be seen via this chart below.
Conclusion: Singapore Needs The Best Talents To Run The Ship
Another common phrase that is being thrown around is the idea that Singapore is in fact not just another country. For any country to showcase abnormal growth, it has to be structured in an abnormal way. Hence, the idea of Singapore Inc.
If we compare PM Lee Hsien Loong’s salary to other leaders around the world, it is clear that he is earning more.
However, in comparison with other top CEOs of Fortune 500 companies, local banks, and STI companies, he’s only earning a fraction of their annual packages. For example, DBS CEO Piyush Gupta earned $11.9M in 2018, and CityDev CEO Kwek Leng Beng and UOB CEO Wee Ee Cheong are both tied at $8.9M each.
Singapore Inc, should continually hire the best talent and leaders, and reward them accordingly. Especially if the country is to continually outperform it’s peers in the global landscape.
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For the 2014 Budget, I wrote:
The Govt released Budget 2014 on 21st Feb but did not address ministers’ salaries.
I suggested bringing back payroll tax to address this but the Govt has no political will to look into this as yet.
Ministers’ salaries in the millions of dollars have continued to attract public’s dissatisfaction and unhappiness.
What is the solution to dispel this perennial disquiet whenever ministers’ pay come into focus especially at general election?
I would like to suggest to the Govt to impose a 1% payroll tax payable by all employers on the total annual remuneration exceeding S$100,000 of each senior executive employee in the private [public-listed companies] and public sectors.
Remuneration in this context shall include director fees, salaries, commission, and all benefits in kind, etc on consolidated group holding-company basis to prevent circumvention by companies paying the senior employees offshore.
The 1% payroll tax collected from employers, not from individuals, should be used as sources of funding to pay the salaries of ministers.
Ministers’ salaries are pegged to the salaries of top management in the private sector.
My payroll tax proposal would be an extension of the pegging method of paying salaries of ministers. It would have a direct relationship with how ministers’ salaries are derived at.
This specific source of funds coming from those who earn more than S$100,000 will help quell the perpetual disquiet and dissatisfaction of the general public on ministers’ pay.
It will no longer be the case that ministers’ pay are paid from taxes of all Singaporeans, rich and poor alike, but from the specific payroll tax imposed on the highly paid executives in the private sector [public-listed companies].
Using general taxation from Singaporeans to pay ministers’ salaries is not the solution. Demagogues will continue to stir political envy and discontent on minister’s high salaries.
Once this funding system is set up and put in a Cabinet Ministers’ Salary Trust by the Govt, it will no longer be the case that ministers’ pay are paid from taxes of all Singaporeans, rich and poor alike, but from the specific payroll tax imposed on the highly-paid executives in both the private and public sectors.
The amount collected at 1% is expected not to exceed $50m.
It is not a personal income tax and I believe S$50m is not a huge sum that the economy could ill afford or that it could start the exodus of companies.
An MP was reported to have said in Parliament that a million-dollar salary is chicken feed on the basis that it would be equivalent to each Singaporean paying only S$1 per year to meet the salaries of Cabinet ministers. This insensitive comment has stirred negative reaction on Facebook last year.
The proposed 1% payroll tax, if implemented by the Govt, is to counter this S$1 mentality, the loose talk in Parliament and in the coffee shops, and in heated political speeches at GE rallies.
It is also a way forward to generate taxes with specific focus, and having transparency of purpose in mind while the economy is still strong.
It is a political expediency to shift away from and reduce direct personal income taxation on the general public.
We do not have to follow the Americans in raising direct income tax on the wealthy as the proposed 1% payroll tax on top executives is not a personal tax on individuals. It is paid by the companies not by employees.
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Donation method:
The other solution is for the Govt to set up a Trust and rely on donations from the public-listed companies to pay the ministers’ salaries.
S$50m will work out to some 500 PLCs donating $100,000 each.
Another solution would be to seek public donations [including from corporations] for the payment of ministers’ salaries. No donation will mean no pay for them. Low donation will be low pay.
Low pay will mean low expectations. High pay comes with high expectations.
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Workers’ Party said in Parliament that they could do the job for half the salary or cap at $500,000.
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It would be S$42,000 per month or S$1300 per day.
Instead of 1% payroll tax, could WP be happy to half it and charge at 0.5%?
[Note: This amount of S$500,000 was corrected in Parliament in 2018. Please see report below in Straits Time on 1st Oct 2018. “Salary formula proposed by WP in 2012 would have given ministers the same pay, says DPM Teo”.
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Parliament: Ministerial salary structure totally transparent, no hidden components or perks, says DPM Teo
SINGAPORE – All the bonuses paid to an entry level minister form part of his $1.1 million annual salary norm, and are not in addition to that amount, Deputy Prime Minister Teo Chee Hean said in Parliament on Monday (Oct 1, 2018).
He said all the components of a political office-holders’ annual salary are set out clearly in the 2012 White Paper on “Salaries for a Capable and Committed Government”, which was submitted by an independent committee after extensive consultation with MPs and the public.
“The salary structure is totally transparent. There are no hidden salary components or perks,” Mr Teo said.
In setting out how ministerial salaries are calculated, Mr Teo noted that the Workers’ Party had in 2012 endorsed the three principles on ministerial salaries set out in the White Paper.
He also pointed out that the opposition party’s proposed pay formula, which it had put forth during the 2012 debate on the issue, would have resulted in essentially the same total annual salary for an entry-level minister as that recommended by the independent committee.
Mr Teo’s extensive explanation of the components of a minister’s pay was made in response to a question from Mr Alex Yam (Marsiling-Yew Tee GRC), and comes in the wake of falsehoods about the issue resurfacing recently.
The claims that have been made online in the past month include accusations that the Government is not upfront about how ministerial salaries are calculated, and that the Prime Minister is being paid $2.2 million a year as a base salary, excluding bonuses, and that he earns a total of $4.5 million.
Mr Teo explained that ministerial salaries consist of fixed and variable components.
The fixed pay comprises the monthly salary and 13th month Non-Pensionable Annual Allowance.
The variable components of the annual salary comprise individual Performance Bonus, National Bonus and the Annual Variable Component.
Together, these variable components constitute 35 per cent of the total norm annual pay, with the fixed pay being 65 per cent.
All the components – fixed pay plus variable pay, including any and all bonuses – add up to form the norm level of $1.1 million for an entry level MR4 minister.
Mr Teo also noted that the Prime Minister’s salary does not have an individual Performance Bonus as there is no one to assess his individual performance.
But to keep to the principle of making a significant part of the PM’s total pay subject to performance, that is 35 per cent, the PM’s variable pay has twice the national bonus compared to other ministers, to reflect national outcomes, in place of the individual Performance Bonus.
The independent Committee recommended in 2012 that the Prime Minister’s total norm annual salary should be two times that of an entry level MR4 minister, or $2.2 million.
This includes all components, including his National Bonus, and there are no salary components or perks beyond this, Mr Teo added.
The ministerial salary structure and benchmark have not changed since 2012, he said, because the Government decided not to adjust salaries even though the MR4 benchmark had increased by 9 per cent.
Between 2013 and 2017, the National Bonus ranged between 3.4 and 4.9 months, with the average over the five years being 4.1 months, he said.
For Performance Bonus, the range was from three to six months each year, with the average across all the political office-holders over five years at 4.3 months.
As for the Annual Variable Component, the range was 0.95 to 1.5 months over the period and the average over five years was 1.3 months.
Emeritus Senior Minister Goh Chok Tong is not a member of the Cabinet, Mr Teo reiterated. So, ESM Goh has not received a ministerial salary since he retired from the Cabinet in May 2011, the Deputy Prime Minister said.
Mr Teo’s detailed explanation on Monday of how ministerial salaries are calculated drew questions from the WP, with party chief Pritam Singh (Aljunied GRC) asking whether he agreed that the Government could have pre-empted some of the misinformation that occurred online by issuing a fuller and more expansive reply to WP’s Non-Constituency MP Leon Perera’s question.
He added that a parliamentary committee that had been tasked to look into the issue of online falsehoods had come to the conclusion that “it is actually more propitious for us to present all the information in an easy to understand manner for the public, and that would reduce the prospect of misinformation online”.
Mr Singh, who was a member of this Select Committee on Deliberate Online Falsehoods, then read out one of the committee’s recommendations, which calls on public institutions “to pre-empt vulnerabilities and put out information in advance where appropriate to inoculate the public”, and “ensure that they communicate with the public in clear and comprehensible terms”.
Mr Perera, who had sought a written answer on ministerial salaries, noted that his question had asked for total bonus months and not only performance bonus.
“Would that not have been an opportunity to… disclose and publish the national bonus level in addition to a performance bonus level?” he asked.
In response, Mr Teo said that the data which Mr Perera had asked for had been provided, but was then ” misinterpreted and became widespread basis for false information”.
And so, he said, he would clarify the issue, adding: ” I’m delighted that Mr Pritam Singh and the Workers’ Party are all for transparency and for debunking falsehoods… I hope that the Workers’ Party will help us to clarify that position by putting it on your website also.”
In wrapping up his response to Mr Singh, Mr Teo said the issue of ministerial salaries is a difficult one to talk about.
“It is an emotional one. There are misconceptions sometimes deliberately propagated. It is easily politicised.”
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tankoktim 