Dear KTM,

You've echoed the same views as this article.

No one begrudges the ministers their salaries, as long as its seen as "adequate". What is missing is the "moral peg" in the formula.

Hammersphere.

Wah, KTM also has reservations? The government jialat liao lar this time. Young PAP aside, even the neutrals are not saying anything remotely favourable. :(

Very nicely put KTM, I agree with you on the moral authority point, and most of the argument, and sadly, the sadness - "oh the silence of the howl". Sigh.

I'm not a free market economist and I'm against pegging the salary of technoracts to the private sector, both because we don't have a free market here but a market where the state plays a big hand in managing, coordinating and even participating. In any case I'm don't want a free market, but the point is that if we don't have one, it is ludicrous to peg the salary as though one exists. But I'm not raising this for a debate, as like you said, it is rather distracting and it is tiresome. But this has a bearing on an observation I want to make on your point concerning S'pore Inc.

The question is who really owns S'pore Inc (not should, which I think we agree, the citizens should). Instruments like the New Singapore Shares (the dispensation is as imminent as the pay rise) and institutions like the HDB home ownership scheme promote the notion of stakeholding (see Chua Beng Huat, Political Legitimacy and Housing, 1997), promote the sense that the citizens are shareholders. But it is after all a 'sense' rather than a reality. It will only become a reality if political institutions are shaped in such a way as to allow for the shareholders, like the shareholders of a company, to call the managers to question, take action on key issues at regular meetings. Interestng that a lot of shareholder revolts are taking place in the US over executive pay. The point is that companies are actually more democratic than our country is - ironic, given that the state is a major shareholder in many major Singaporean companies, and also regional ones - the cycle of political-economic virtue shuts us all out. Is it a wonder that many Singaporeans prefer to cash out and invest their life-share somewhere else (the 'quitters') leaving us (the 'stayers') with reduced brains (which thus reduce brain-pool supply of local talent and increase civil service wage)and voice (which thus reduce the number of KTMs who can spot the glaring MR4 problem while sorting out the KT)?

Ok, before this starts becoming a lamentation, a cry of despair, one last comment. I would like to change your statement that 'politically, this is a HUGE emotional problem with the masses'. Rather than an emotional problem, I think this is a HUGE political problem for the masses, and I don't know, I suspect that people are emotionally tired and fed up. It is either going to feed apathy or lead to shareholder revolts, electoral ones I presume, but then Singaporeans do have a short memory and attention span, and then again, maybe not this time, since globalization is already having a material effect - hard to forget when kena squeezed by real life.

An important indicator besides the KTM (who I think is more pro-PAP than neutral) is the kind of articles that typically pro-PAP journalists write. In recent times, even the Chua sisters have raised concerns about the ministerial salaries and budget debates. If the usual supporters start asking questions, you can bet your HDB flat and KT stall that the man-on-the-street is going to ask some very difficult questions as well!

There are many problems with the MR4 benchmark - most have been discussed to the death. But one that particularly alarms me is that it is pegged to the highest earners. Given that Singapore is going all-out to attract very rich people around the world to park their funds here, this benchmark, if it remains as is, will skyrocket the MR4 salary scale in the coming years. It would be much more than just $2.2 million.

On a different note, one should read the full transcript of PM Lee's speech when he first announced this review. He noted that there is a marked increase in resignations at the lower rungs of the civil service, and he did not dedicate much time to the ministerial salary benchmark. So, by logical extension, the salary review should actually have the greatest impact at the entry level. Was the reference to the high resignation rates at the entry level simply a red herring to somehow justify ministerial wage increases, is everybody mis-reading the signals, or have they just shot themselves in the foot again? We'll find out soon...

"The KTM is baffled that people can invent a formula that cannot be used. If the intention was to come up with a benchmark that yields bigger numbers and then adopt a smaller number to demonstrate "sacrifice" on the part of the Ministers, then the KTM must say that this strategy isn't working well at all. It isn't working period."

Woah...woke up this morning to see that even KTM, usually poised to jump not on the side of the bandwagon, has jumped on the bandwagon :) . But I think the above KTM point is an excellent point. All benchmarks are imperfect necessarily so. But this is funny. Even the paymaster recognized it is somewhat imperfect.

"It feels like the society is descending into chaos"

Yar lar. They cannot do this kind of thing. Its one bad thing if the electorate forget, its another thing if the electorate don't.

*hugz* KTM, dun be sad. We all love you anyway. Keep frying your kway teow. =)

KTM,

Bill Clinton was impeached over we know what. Did he lacked moral authority? Well, he is still very popular, does it give him moral authority? Bush was elected on minority votes, and misled US into a war - moral authority? What you have not convinced me is (1) how to define this thing called moral authority (2) how to measure whether political leaders have enough of it. Does good governance require moral authority? This lack of moral authority argument has been used many times when discussing the pay hike. Should someone should perhaps spell out exactly what 'moral authority' is before we all begin to nod and agree with what is being said about moral authority (or purportedly the lack of)?

Bart:

Even if many of us may believe that Bush lacks moral authority, the point is that as long as enough Americans believe he has moral authority, then they will trust his decisions (and many still do). In fact, insofar as former supporters of his distrust him now, it's because they see the WMD fiasco as undermining his moral authority. Same for Clinton. Those who supported him did not think the incident reflected on his moral authority as a political leader. Those who wanted to impeach him did. The problem KTM is highlighting is that the pay hike undermines the people's belief in the PAP's moral authority. Maybe from an objective standpoint (if that is possible) they are acting morally. But if the populace doesn't believe it, then they will not trust their decisions.

Hi everyone,

Thanks for your comments and sharing your views.

hammersphere,

Quick clarification. The KTM doesn't exactly agree with WP's views, and therefore cannot be "echoing" their views. In particular, while the KTM thinks that Mr Low's proposal to peg to the lowest 20% is a very shrewd political move, it is not a particularly fair peg either.

Thanks to globalization, in the same way that the rich dudes will keep getting richer, the poor fellas are likely to see their incomes stagnant and there's little that the Government can do. The Government can do some income redistribution, but it is quite unlikely that real incomes can increase and may in fact decrease.

Your proposed peg is the same as freezing or lowering pay. That's not entirely fair either thinks the KTM. What we need in politics today is a sense of fair play and some graciousness. WP is actually doing good on this front. Let's keep it this way? :-)

Bart,

Good points. The KTM's view on 'moral authority':

Very simple. Governance is complicated. General population is not expected and shouldn't be expected to understand. The country cannot be ruled by referendum anyhow.

The KTM test of moral authority: "Government proposes some new policy. People have no clue what it's about (or they have some vague idea, but most are completely off the mark) and Government says something that they vaguely understand. Yet, they will still say, "Yeah, sure, let's do it". Not because they understand, but because they have faith that the Government is acting in their best interests".

The KTM is not a political scientist. This is the best that the KTM can do in response to your request for a definition.

How does this apply to Bill Clinton? The KTM actually doesn't know, but moral authority is not the same as morality. Do people expect their leaders to be saints and to do no wrong? The KTM thinks not. People expect their leaders to lead and minor personal failings, if they do not impinge upon official duties, are often forgivable.

When a commander leads his troops to war, does the commander tell his troops to charge ahead and he stay behind under cover? No, he goes with his men and he will die with them if necessary, and he must be willing to give up his own life in exchange for the lives of the men under his charge. That's the burden of leadership.

There is this urban legend that the KTM heard. Dunno whether true or not. It involves a top civil servant. Apparently, there was this policy that was going into effect and when the policy goes into effect, car prices will rise. This fella knew this and he was going to buy a car. Knowing the timing, he could have bought his car early and avoided paying extra, but he didn't. He waited until the policy went into effect AND THEN he bought his car at the higher price. That's moral authority to the KTM. Unfortunately, it doesn't come cheap, but that's the price of leadership. :-(

Bart,

(1) I don't think moral authority can ever be properly defined. Moral authority is a moving target that shifts with changes in society. The best definition one can get is within the context of society in a certain place and time. In Singapore's current case, it is obvious from the many cries of dissatisfaction over the increase in ministerial salary that Singapore society at large views that the government does not have the moral authority to increase ministerial pay. As such, I think the KTM is justified in invoking moral authority to support his argument in current Singapore context.

(2) Based on what I said in (1), the only way to measure is to ask the opinions of the people in a statistically valid survey. However, I don't think that we need a statistically valid survey in this instance. Using our own "quasi-statistical sense", I think it's a good guess-timate that Singaporeans have lost faith in the moral authority of the government, although it would be best to confirm it using a statistically valid survey.

Bart,

My view is that moral authority does not exist, but rather social proof exist, i.e. if the society condones what you do or rubber stamp your policies, then you are given the mandate to govern the country through elections. The social proof argument makes it easier to look at the Clinton and Bush situation. Politics is not an arena of morals but an arena of interests.

KTM,

I want to advocate another argument why there is negative reaction towards the pay hike. In my view, it's the bad political spinning of our ruling party. A few weeks ago, when Lily Neo ask for subsistence to raise $30 more for the poor old people, it was flatly refused. However the incident is now meshed up with the reactions towards the pay hike of the ministers. Although these are two seperate matters, the public has associated both issues together emotively.

If they have been smart by raising $30 for those poor people first, I doubt that the negative feedback from the public can go this far. Of course, as I have said before, it's a seperate matter but it has become some kind of lop-sided dialogue.

In the end, the cynical view is that they will raise it by 1 million anyway and most likely get away without paying any political price (because people forget too easily).

Bart,
I guess moral authority is rather subjective, as per what Twasher has said. and how to measure whether good leaders have enough? I guess its to do with the amount of support they get? Whether good governance requires moral authority, i guess that depends on how u define as good governance?

Hi guys,

I respectfully disagree. Recall that Clinton was a draft dodger, and Bush used his father to get him into national guards, both avoided Vietnam. Yet as presidents, both sent troops to war. Clearly, by the yardstick examples you guys provided, both did not have the moral authority to do so. Thailand's coup government overturned the results of two landslide elections on the pretext that Thaksin lack the moral authority to govern. Strange argument isn't it? Who has the moral upper hand? Does a government become stripped of moral cover just because a large section of the population does not like its policies?

To argue whether a course of action, particularly an unpopular action, is justified based on the level of moral correctness exposes all of us to slippery slope. Upmost intellectual caution must be exercised when using this argument. Clinton, Bush, Thaksin were all elected (the latter two in arguably flawed elections). That election rules and procedures are mostly followed provides mandate for the government to govern. It is not a moral mandate, merely an electoral mandate, which our government does have based on the result of the last election.

Finally, no one has yet answered my question as to whether moral authority causally leads to good governance (which I don't believe is necessary the case). The case for the pay hike is about attracting/retaining talented people to ensure good governance, not about morality.

Strange, I thought the KTM always professes himself to be a non economists, and that he is no expert in it. So why the sudden proclamation that he has this inner free market economist? Could it be that he is merely a follower of a free market ideology that is a mix-mash of economic theory and some theology logic?

To bart, the question is whether are only Ministers the only engines of good governance in a government? Are you as a good economist and civil servant not able to participate in the delivery of good governance? Or are you merely contented enough to state the claim that you are just doing your job?

Hi KTM:
Nice post.
I totally agree with you that the ministers now lack moral authority not just with the people but also with their so-called grassroot organisations.
For those who feel that they are sacrificing time and resources with these organisations, what do you think they feel about these so-called political leaders?
( I know many will start saying that these grassroot leaders are in for some personal benefit etc- but I am sure there are some in for the people altho this view may be misguided according to some)

And to Bart: I don't agree with you ( and I don't want to waste time telling you why- you won't get it anyway)

Bart,

Does a government become stripped of moral cover just because a large section of the population does not like its policies?

I would say yes, only if the section of the population deems the lack of moral authority as the reason why they do not like the government policy. In the case of ministerial pay increase, I would argue that most of the population see the existing $1.2 million salary of ministers to be a princely sum that more than adequately compensates the ministers for their work and there is no moral grounds to increase it further (such as a minister's family is starving to death, or that minister cannot meet housing payment etc).

Finally, no one has yet answered my question as to whether moral authority causally leads to good governance (which I don't believe is necessary the case). The case for the pay hike is about attracting/retaining talented people to ensure good governance, not about morality.

I agree that moral authority does not necessarily lead to good governance. It would be a stretch to make that claim. At the same time, how about answering whether pay increase will necessarily lead to good governance?

Bart,

Perhaps you may wish to clarify exactly what you are disagreeing with.

"Does a government become stripped of moral cover just because a large section of the population does not like its policies?"

The answer is no. The KTM may not know what he is saying, but from his perspective, moral authority is not a boolean variable. It's not like you either have it or you don't. The KTM's view is that it's a matter of degree.

Neither is the KTM implying what Dr Huang suggested, i.e. that the "ministers now lack moral authority" (Dr Huang please dun anyhow put words in the KTM's mouth hor. :-P). KTM's point is that increasing salaries at this particular point in time has a significant political cost and that cost can perhaps be quantified by this fluffy thing called "moral authority". Agree with you that the KTM has done a terrible job at pinning it down specifically, but this is something that everyone pretty much understands at an intuitive level.

Anyhow, whether Clinton, Bush and Thaksin have moral authority or not is really none of our business. Why we so kay poh to worry about other people's business when we haven't quite sorted out our own front yard? :-) So you want to compare the pay of our politicians with Clinton, Bush and Thaksin too?

The KTM must say however that the removal of Thaksin is also a bit sad 'cos it's seriously a tight-slap for democracy. The KTM doesn't buy this argument about using force to remove a democratically elected leader at all -- and it's not for any love of Thaksin. It's just a matter of principle. It's double standards in the KTM's opinion.

"To argue whether a course of action, particularly an unpopular action, is justified based on the level of moral correctness exposes all of us to slippery slope."

Agree, but the KTM isn't approaching this matter from a moralistic perspective. Truthfully, how different is $1.2 million from $2.2 million? Actually, the KTM is quite sure it won't be $2.2 million also. The point here is not the amount. People dun even know how much the increase is going to be and are cowbeh-ing. The KTM's analysis is from the perspective of cold calculating pragmatism (the KTM ain't good for anything else unfortunately). Is the salary increase worth the political capital?

Put yourself in the shoes of a Minister or senior Civil Servant: is your pay seriously so bad that you need an increase at the cost of incurring the wrath of the general population? Perhaps you don't expect any appreciation for your work, but do you really want people to curse and hurl insults at you? It's all a matter of cost-benefit analysis and it doesn't quite make any sense to the KTM.

"Finally, no one has yet answered my question as to whether moral authority causally leads to good governance (which I don't believe is necessary the case)

The answer is obviously no. The KTM's question to you is very simple: suppose a man gets to pick a wife. Does he pick a pretty or a virtuous wife? Answer: pick one who is BOTH pretty and virtuous lah! It's a no-brainer right? Does it mean that a virtuous woman is necessarily pretty? :-P

From today's CNA, a little quote from the GOM:

"The Minister Mentor warned that the Singapore economy would be in jeopardy if it does not pay top dollar for top people.

He said if this S$46 million was cut to maybe S$36 million or S$26 million, the country would save S$20 million but in the process, would jeopardise an economy of S$210 billion.

"So for the average family earning S$1,500-S$3,000, we are talking of astronomical figures but for people like me in government, to deal with the money which we have accumulated by the sweat of our brow over the last 40 years, you have to pay the market rate or the man will up stakes and join Morgan Stanley, Lehman Brothers or Goldman Sachs and you would have an incompetent man and you would have lost money by the billions," said Mr Lee.

While other countries may have leaders who are paid less, Mr Lee said rewarding Singapore leaders well is a system that has worked and is above board.

He said: "If you are going to quarrel about S$46 million - up or down another S$10 to S$20 million - I say you don't have a sense of proportion."

And when it comes to benchmarking, Mr Lee said his own annual income, which is between S$1.2m and S$1.3 million, is a fraction of what the top 20 percent in the Government of Singapore Investment Corporation (GIC) earn."

Ted quote LKY say
"
He said if this S$46 million was cut to maybe S$36 million or S$26 million, the country would save S$20 million but in the process, would jeopardise an economy of S$210 billion."

Well done then, LKY, why not pay each minister $1 billion afterall the granddaddy of PAP will always resort to such reason for increment. Afterall $1 billion is a peanut compare to $210 billion. Well, with few minister, we still have lost only $10 billions with our dear PM taking double the amount because of holding two posts, though not definitely double his productivity and intelligence.

Do LKY think it is because of the ministers that Singapore is lucky. I don't really think so. It is the people that obedient, does bother too much, work and work attitude that what make Singapore today. If Singaporean is like western country like United State with freedom, I doubt those ministers and LKY will last long in cabinet.

Since we have nothing to benchmark against, then anything gov say is just taken to be true whether we like it or not.

KTM,

I used Clinton and Bush as examples to highlight how tricky it was to use the 'moral authority' argument, two draft dodging presidents sending troops to wars. I am not disagreeing with anything specific you said, but rather framing the anti pay hike argument around 'moral authority'. Electoral mandate is sufficient.

Let's stretch the argument a bit. How many Ministers currently live in HDB flats? How many Ministers ever lived in HDB flats? Probably very few. Do they therefore lack the moral authority to formulate HDB policies or extol the virtues of public housing?

How on earth can the pay of a Minister determine his level of moral authority. So he is morally authoritative when he draws $1.2 million and becomes not when he draws $2 million? The lesser the pay, the higher the moral ground?

Indeed, like Ted pointed out, senior civil servants are also engines of good governance. Their pay is also reviewed upwards I think. The case for the pay hike has always been for good governance. It is not about $1.2 million or $2 million to this individual, that Minister, or that civil servant, no. It is about the system, how much to put in to ensure the system works as well as it can.

Personally, I am not convinced that you need to increase pay from the current level to keep the system from functioning well (perhaps pay increase at entry level is justified given the high resignation rate). However, I against this moral huff and puff - whether it was Wee Shu Min, scholarship bond breakers or pay hikes.

Dr Huang - just because I disagree doesn't mean I don't get it.

KTM:

I think KTM shouldn't be sad for those reasons :).

You don't need moral authority. Plain old fashioned vanilla authority is all you need la. You no need good reasons, you no need political acumen, you no need brains, you no need leadership when you got good old iron-fisted authority; people will do your every bidding regardless of merit.

Also hor, most benchmarks and formulas are nonsense in real life. Some of them are meant to be ignored, and will be dangerous if taken seriously because the tendency is that people will prioritise what is good fantasy-wise(benchmark) over what is good reality-wise. Both don't always correlate, especially with crap benchmarks, worst part is, when something is objectively crap but benchmark-tastic, it is easy to deny and turn a blind eye to both logic and reality. Always pick reality over benchmark. No need to be sad if a benchmark is not followed. Not saying minister's salary is reality-based.

See, I am of opinion people are KPKBing about the wrong things. Normally, I'm not one to tell people what to KPKB about, but it's not a sacred 'kao' is it? I think they should be KPKBing about the system that allows such a thing to happen in the first place. Unpopular, unjustified pay hikes is but a symptom of something bigger. Now, that's something to be sad about.

That being said: Be very, very careful of pragmatism... hor. Pragmatism has a tendency to sacrifice long-term potential for short-term gain.

Analysis via pragmatism (practicalism, rather) is not based on logic. Pragmatic analysis is to some extent, based on fear and greed. I always prefer straight analysis.

Not saying that KTM is fearful or greedy, of course.

I don't see whats the problem with using the words moral authority except that people think its a fluffy word and associated with Bush. There are various values associated with democratic leadership that is clear to many. I think the word 'Moral' encompass this quite fine. MM Lee will agree. He might speak of an honest individual, a talented honest individual. He might point to the 'communists' and their example in a limited sense (pardon the lack of quotes). This is probably a concept that is too archaic for many, but I don't know. On the pay hike issue, the PAP I believe wants to have moral authority to do what they are doing.

Ned:

I am not saying that moral authority is subjective. In fact, I believe it to be an objective truth that Bush lacks moral authority. However, insofar as we are concerned with whether leaders possess enough moral authority to gain the trust of the people, then it's what the people think of them that determines if they can pragmatically push through unpopular policies without a backlash. Therefore, because at one point a majority of Americans thought that Bush had moral authority, they were willing to accept his unpopular policies as well. Because Bush's perceived moral authority has been eroded in the last few year, it is now more difficult for him to do the same. From a pragmatic point of view, the government's latest move erodes their moral authority in the eyes of the people, which means they will find it harder to push through unpopular policies in the future (OK, they won't, because it's a dictatorship, but they would find it harder to persuade people of their wisdom, etc). As far as I'm concerned their moral authority has always been at the same (low) level, though.

http://www.channelnewsasia.com/stories/singaporelocalnews/view/268475/1/.html
"So for the average family earning S$1,500-S$3,000, we are talking of astronomical figures but for people like me in government, to deal with the money which we have accumulated by the sweat of our brow over the last 40 years, you have to pay the market rate or the man will up stakes and join Morgan Stanley, Lehman Brothers or Goldman Sachs and you would have an incompetent man and you would have lost money by the billions," said Mr Lee.

Hmmm...I wonder which MOS or Ministers will be able to receive their current compensation from the mentioned investment banks? In other words, will these investment banks hire and pay the current wages of our MOS or Ministers?

If so, maybe the readers on the blog can volunteer a few names in terms of which MOS or Ministers will potentially be able to draw $800K - $1.2 M (actually it is more if you factor in the annual present value of the future pension stream for the next 20-30 years) from any of these investment banks now, or even from major private sector companies?

All

The problem is also lies in the fact that it is equal for all ministries whilst the reality is that not all can command such benchmarks due to the nature itself.

Also noticed recent clarification on pensions by PMO's office.

As examples.

The ones which are likely to retain:-

Financial Instituitions

Tharman Sharmugam
Lim Swee Say
Lim Hwee Hua
S Iswaran

Legal Instituitions
S Jayakumar and significant portion of the bench or AG's office.

Real Estate Instituitions & MNCs
NPB
Dr Amy Khor

Medical Instituitions & MNCs

Dr Vivian
Dr Balaji
Dr Ng Eng Hen
Dr Khaw Boon Wan

MNCs

George Yeo
Raymond Lim

Regards

There seems to be a certain disagreement here by Bart against KTM on the use of the term "moral authority" here as a definitive indicator on which the pay rise for ministers should be implemented.

To quote Bart:-
(1) how to define this thing called moral authority
(2) how to measure whether political leaders have enough of it. Does good governance require moral authority?
This lack of moral authority argument has been used many times when discussing the pay hike. Should someone should perhaps spell out exactly what 'moral authority' is before we all begin to nod and agree with what is being said about moral authority (or purportedly the lack of)?

Morals is an abstract notion of right and wrong that is based on the society's general acceptance customs of conduct that would normally suggest the qualities of upright, honest, straightforward, open, virtuous, and or honorable (This list is by no means comprehensive and subjected to the society's notion of morality).

And from the suggested meaning of morals, could we therefore logically deduce that for one to have 'moral authority', one would have to lead by example on those notions of morality, such as the aforementioned qualities in my previous paragraph on that which is deemed 'correct' by the general populace within the society. (Which I believe is what KTM is trying to imply in his first commented reply.)

So why does KTM think that this logic behind the intended payrise is flawed? Simple, because there is no sufficient proof that the current pay which the ministers are getting are insufficient. And why is it lacking in moral authority? Simple, because the common man had failed to see why the current pay of S$1.2 million is insufficient for any of the cabinet ministers without sufficient hard data on loss of talent, and that suggests lack of openness. While they intend to raise their pay, they had refused to increase an additional $30 for the poor, and that suggest hypocrism.

Does good governance require moral authority?
Good question, but I believe the crux of the question is, does the lack of moral integrity promote good governance? That is where I believe we should shift our focus from, in view on the subject of ministerial pay rise.

If the lack of openness and hypocrism is the basis on which good governance is based on. Perhaps this is the point at which we start to reevaluate our society's notions of morality and our expectations of our government.

Perhaps packing my bags earlier isn't such a bad option afterall..

WANG - thanks! I do agree largely with you that these individuals will likely to be able to command $800K-$1.2M(or more) total compensation. Even though the pension is half of the current compensation, the pension spreads over 20-30 years is not an insignificant figure (0.5M a year (50% of current comp) for 25 years discounted by 5% is around $7M in present value). Unless you are the CEO or C-level executives of major MNCs, very few executives have such attractive pension schemes for life.

Financial Institutions
Tharman Sharmugam, Lim Swee Say, Lim Hwee Hua, S Iswaran
Legal Instituitions
S Jayakumar and significant portion of the bench or AG's office.
Real Estate Instituitions & MNCs
Dr Amy Khor (who is a mayor)
Medical Instituitions
Dr Vivian, Dr Balaji, Dr Ng Eng Hen
MNCs
George Yeo, Raymond Lim, Dr Khaw Boon Wan

What about ministers such as PM Lee, SM Goh, MM Lee, DPM Wong, Dr Lee Boon Yang, Mah Bow Tan, Lim Boon Heng, Lim Hng Kiang, Teo Chee Hean, Yaccob Ibrahim and other MOS like Gan Kim Yong, Lee Yi Shyan, Grace Fu, Assoc Prof HO Peng Kee, ZAINUL Abidin Rasheed, Mrs YU-FOO Yee Shoon , HENG Chee How, Assoc Prof KOO Tsai Kee and Speaker ABDULLAH Tarmugi and Depty Speaker Matthias YAO Chih and Ms Indranee RAJAH. I did not include the Parliamentary Sectaries and Mayors because I am not sure if they are paid more than $800K a year ( I don't think so).

The full list is here http://app.sgdi.gov.sg/listing.asp?agency_subtype=dept&agency_id=0000004564

It seems that the newer MOS and Ministers are more likely to obtain their compensation now in the open market. Is it because of the increasing challenging of attracting current potential candidates to stand for election with the PAP that there is a push to increase compensation?

I think the key question which should be asked in Parliament is how many suitable and capable individuals have turned down the opportunities to stand for election for office holders' positions because of the current "unattractive" compensation. I wish my PAP MP will ask that.

Sze Meng

Would have to dispute the pension figures by you, based on the clarification by PMO, it is only S$179,820 assuming at least S$1.2M per annum and served at least 18 years.

Mayoral positions are equivalent to SMOS or MOS.
As I stated, to me, the problem is not the pay per se, it is
a) Non-transparent KPIs
b) Not all ministries are equivalent
However,as KTM stated there is a political cost/public perception cost.

Further, at times the public scrutiny for some is ridiculous considering
a) they are not allowed to be issued share options
b) no shares investment allowed except via blind trusts(strictly enforced).
c) there is no scandal of business sweetheart deals as compared with the oft cited examples of NZ, Australia, UK, Sweden or Nordic countries(since I have friends there)

Further, to be fair, most portable market skills are the big rain makers who would be in investment, finance, banking, accountancy, law.

Assumptions Only
Speakers Circuit
MM Lee
(A lot of speech agent companies would pay bigtime upfront to have him eg IMG Consultants)
Cost Minimum US$500K to US$1M per meeting(virtually tax free since it would be global)
Corporates would pay up to US$100K per seat(Personally I would pay up to US$1K)

I would speculate that for some ministers, it would be difficult to move due to the Official Secrets Act eg Teo Cheen Hean & Wong Kan Seng.
I have not mentioned other MNCs which liberals progresives hate ie Defence Contractors which would like to have them

All others, I have no comments.

Regards

Twasher,
I meant subjective in the sense that there are people who believe bush has the moral authority and people who do not. It is all dependant on what people think, which supposedly translates to how they vote.
However with regards to the relationship between good governance and moral authority, it depends on what one defines as good governance. Does good governance involve pushing forward policies despite popular opposition? If it does then the issue of moral authority would thus be moot.

It has been a long time since the Cabinet attracted genuine private sector corporate types like Richard Hu, Peter Chen or Yeo Cheow Tong. Speaking of whom, anybody knows what Yeo Cheow Tong is doing? Must be raking in the millions, sought after by GS, MS, ML whatever. How about David Lim?

I believe every Singaporean fit for NS is fit to flip burgers at McDonald's. If the burger crew works 50 hours a week at $5 per hour, he will earn $1000 in 4 weeks, not including bonus, employer's cpf etc. So why are our national servicemen paid at such a massive discount to market rates even if we peg that sum to the most uneducated serviceman? (Speaking of which, why do we have a revolving door SAF leadership? Maybe national defence is really not that important at all, compared to the stewardship of ministers who must be kept happy or will turn corrupt)

I think we owe LKY, Goh Keng Swee, Hon Sui Sen, Lim Kim San, Rajaratnam and whoever I forgot a big performance bonus for they indeed performed miracles. However, I am not convinced the current ministers have done anything more than coasting along. Besides, if the government subject junior civil servants to all sorts of KPI and ranking (and yanking), why dont we see a ranking among the ministers, with commensurate performance bonuses?

Remember in down days, when a 10% pay cut for the ministers was enough to give them the moral authority to say "I feel your pain."? With a 55% pay rise coming, I think the ministers must be breaking out in song and dance.

WANG - I stand corrected on the pension. According to the PMO, "The maximum pension for a minister drawing a total annual salary of $1.2 million is $176,500 per annum (not $792,000), and to get that maximum pension the minister has to serve for 18 years. Pensions have been frozen since 1994, so that all salary revisions since then (and this one) will have no effect on pensions." Thank you for raising this up.

I do think SM Goh and MM Lee definitely will be able to earn more than $1.2M in the speaking circuit for sure. Also, I didn't realized that the mayors are equivalent to MOS/SMOS, which means that they will also likely to hit $800K.

The comments have come too fast and furious and the KTM doesn't have time to address everyone, so perhaps he will make some vague attempts to address some of the points in brief.

Bart & RSE,

The KTM is no fan of fluffiness and he is most definitely not particularly emotional, notwithstanding he recently demonstrated capacity to feel sad about the current state of affairs.

While this thing about moral authority is somewhat fluffy, it's tied to this thing called political capital, which may eventually translate to votes. The KTM would actually like to say "will", but given the perculiar nature of our elections (i.e. the walkovers), there are no certainties there.

PAP may think that it is infallible, but the KTM doesn't buy that. The so-called percentages that they got at the recent polls are by no means reflective of their level of popularity/support, given that it's all been walkovers. Cracks are also appearing.

The KTM believes that it's quite possible for the PAP to lose an election and when that happens it wouldn't be a gradual thing. It will probably be overnight. Maybe the army come in and we'd have a coup? Maybe not.

Some people may be happy if the PAP loses, but these fellas have no idea what they are asking for. The current system is in an unstable equilibrium and if it topples, it's not going to have a hard landing (yeah lah, people will say it's PAP's fault, but it's also the truth). There is no viable alternative in the near horizon and if something drastic happens, it will not be good for the nation. While there is this talk of alternative elites, they don't exist at present and it is not clear that they will appear anytime soon. Stability is good.

The heart of what the KTM is trying to say was expressed quite eloquently by Catherine Lim (in 2000!). In terms of running the country, the present Government actually works fine. Catherine Lim has another article in the ST today. People may wish to go and read it.

The KTM would also like to quote Mr Ngiam Tong Dow: "At the first sign of a grassroots revolt, they will probably collapse just like the incumbent Progressive Party to the left-wing PAP onslaught in the late 1950s.".

There are BIG policies that affect the long term viability of the nation: healthcare, development of industries, investments in research, education, etc. There are other policies that are actually microscopic and don't actually affect the big picture: upgrading for elections, $290 for PA, and now Ministerial salaries. As it turns out, the PAP is pretty good with the former but completely lau pok with the latter. If they lose and the system breaks down, it really makes no sense, but as it turns out, the man on the street really doesn't know or care about the former and is only concerned about the latter.

The KTM is not talking about morals here. He is highlighting a serious structural problem that can lead to some serious consequences. From the KTM's perspective, the challenges that we face as a nation are very much more serious that the man on the street can comprehend. The KTM believes that a stable government that is able to take tough decisions is required to tackle these issues effectively.

"That being said: Be very, very careful of pragmatism... hor. Pragmatism has a tendency to sacrifice long-term potential for short-term gain".

This is bogus. You are confusing myopia with pragmatism in my opinion. :-)

Sze Meng & WANG,

The KTM thinks that the actual increase and absolute amount of money paid to the Ministers is not the problem at this point. The problem lies in how the Government is justifying the increase and in the timing of the increase --- and of course in the benchmarking.

The KTM doesn't understand why the Government keeps talking about how much the Ministers can get in the private sector. That really isn't important at all to the KTM.

The fundamental question that we all have to ask ourselves is: "How much is a Minister WORTH to us? How much are we willing to pay for a Minister?" The are two important factors here: (i) what is the "intrinsic value" of the job; and (ii) what is the supply/demand.

Perhaps the KTM can illustrate what he means with an example. Suppose the KTM is a really successful kway teow man who makes a lot of money selling kway teow. Suppose for a moment that he can sell so much kway teow a month that he can drive Mercedes and wear Rolex. Dun laugh. Got such hawkers okay!! (Too bad the KTM is only cooking up an example here).

Suppose again that you have this Government canteen which has a vacant stall and the decision is to have a kway teow stall. Should the Government ask the KTM to come and sell his kway teow at the canteen because the Minister likes his kway teow? In order to do so, the Government will have to match his pay or otherwise he won't come! But seriously, do we need Mercedes and Rolex kway teow in a Government canteen?

The KTM is not trying to say that the job of the Ministers is not worth much. The point here is that the "intrinsic value" of the job is clearly a very important factor. The KTM actually has no fundamental objections to pay a million or two for the Ministers. Ministries are pretty big entities and they deal with billions of dollars. If we have a monkey at the top, any mistake will cost tax payers much more than a million or two.

Of course, there is the question of whether the incumbents are doing a good enough job to justify their pay. Fair enough, these fellas need to somehow justify their existence. However, we have to keep the job separate from the fella holding the job. If the fella currently doing the job is inept, it doesn't mean that the job is worthless. The job is worth what it is worth. If the incumbent is useless, the correct thing to do is not to reduce the salary for the job. The correct thing is to get rid of the incumbent and find the next better player.

The comparison between public and private sector is also not particularly useful since it's like comparing apples and oranges. A fella who is successful in the private sector may be completely inept when put in the public sector and vice versa.

The KTM would suggest instead that after the "intrinsic value" for the job has been established, thereby giving us a baseline for how much we are willing to pay for the job, the next question would be "how many people can do the job and how much do they expect to be paid for it?"

Suppose any monkey can do a Minister's job, then clearly there is no need to pay more than peanuts. :-P Suppose however that we only have a small number of eligible candidates for the job, then we must somewhat match their pay --- but we also cannot overpay. If all the fellas who can do the job well are way beyond what we think the job is worth, then just gotta lower expectations and find the best candidate that is willing to accept the pay, notwithstanding that he/she might not be the best candidate and will only yield sub-optimal performance.

It turns out that the public service is special. There are individuals who are willing to take a pay cut to do some national service and so it might just work if we have some sub-optimal fella at the helm for a while and then replace him/her as soon as a better fella comes along. If we want to operate like Singapore Inc, then this should be the way what.

Of course, the KTM has been talking in a vacuum. What is the intrinsic value of a Minister's job? What kind of a candidate/qualities is required for a Minister? Dunno leh. The KTM is a kway teow man remember? How is he to know? He can tell you what kind of hum makes good kway teow. :-P The KTM is only proposing a framework with which to look at the problem. Maybe it makes sense. Maybe it does not, but talk is cheap what, so why not? :-)

KTM,

I think the interesting discussion is to determine the intrinsic value of a Minister's Job. Given that it is so difficult to determine the intrinsic value, the current best alternative is to use the market to determine the value in order to find the capable (already paid high market wages) and willing (compensation for the downsides of being a public figure). If the potential minister has a high desire to serve the public, then that may be able to compensate the lower wage.

Someone will stand for election to be a potential minister if

Desire to serve the public > Loss/Gain in current market wage (currently in debate) + (Non-monetary)Loss in being a public figure + Probability of not making the cut to be minister (2/7 for the current batch where Dr Balagi and Cedric are not acting and/or full Ministers).

Maybe another focus is to think about how to cultivate the desire to serve the public in Singapore. There are more than one leverage in the discussion of convincing capable and willing individuals to serve.

Sze Meng,

"the current best alternative is to use the market to determine the value in order to find the capable (already paid high market wages) and willing (compensation for the downsides of being a public figure)".

The KTM's point here is that maybe the current status quo is not good enough. If we consider only "market value" then there is a risk of over-paying, c.f. Mercedes + Rolex kway teow man in Government canteen.

As for willing, given that the current wages are at $1.2 million, surely got a lot of willing fellas, so the real question is where to draw the line.

If we dunno what the intrinsic value of the job is and we cannot define what it takes to do the job, then what in the world are we really talking about? :-)

They are benchmarking the 6 sectors top earner salary.

That mean they are also benchmarking the 6 sectors top earners performance and results?

So at that instant of comparsion,
the amount & the percentage rise of the output generated from the manufacturer sector compared to their last year......

So can we use this as a benchmark for the % increase for our manufacturing export in a year?

Can we also use this as a benchmark for the % of net jobs created in a year?

That mean should we expect them to bear the responsiblity of the public sector company not having investment loss? Right?

KTM,

You say "As for willing, given that the current wages are at $1.2 million, surely got a lot of willing fellas, so the real question is where to draw the line."

This is why I say Capable AND Willing - stress the AND. Not everyone capable of being a minister is willing to be a public figure or the desire to serve the public as a political office holder.

Does anyone reading the comment threads have any ideas how we can better determine the intrinsic value of the job of the Minister without just resorting to the market wage benchmark? Maybe we can get a good brainstorming session going on this....

Sze Meng,

"This is why I say Capable AND Willing - stress the AND".

No confusion here at all. The problem is as the KTM has highlight above, the definition of "capable" (i.e. where to draw the line).

Is a doctor who can wield a scalpel skillfully and make a ton of money also a "capable" Minister? Suppose for a moment that the KTM is a seriously talented kway teow man (which he is unfortunately not) and he can sell enough KT to make $1 million a year (maybe he's a kway teow towkay). Does it therefore make the KTM as capable as a neurosurgeon and therefore a suitable candidate for Minister?

This is the risk of benchmarking to the private sector or at least the risk of claiming that one's pay in the private sector is a measure of one's capability.

KTM - do you or anyone else know if there is any job description for a MOS/Minister position in the Singapore Government?

KTM - also, when I use the word capable, I meant capable to take on the role and responsibilities of a Minister.

One assumption to the market wage benchmark is that if someone excels in his or her career in his/her respective job scope(business, academic, law etc) and earns a lot of money because his/her service is highly valued, he or she has the potential to perform the role as a MOS/Minister which is highly demanding.

If you cook really good KT and can run a franchise effectively (think MacDonald), allowing you to earn an annual net profit of $1M, you are definitely a very capable businessman (it is physically not possible cook KT on your own without help and earn $1M per annual of net profit)...whether you are capable as a Minister...that goes back to whether there is a job description we can evaluate you against...

It's appropriate that on this Easter, one is reminded of the man's claim that, should the CPF funds be plundered, he will rise from his grave to resist it. Well, he's still alive and kicking, and he's leading the charge to loot the citizens' savings.

Sze Meng,

Question: who writes the job description? :-) Suppose the KTM humtums one for you, will you accept it? Will Singaporeans accept it? Should we have a referendum and draft a job description that's like the Constitution?

KTM - I think the Government can take the lead to write the job description and persuade and convince the majority of Singaporean to accept it. politicas is also about persuading people, beside allocating resources.

Someone says:"
They are benchmarking the 6 sectors top earner salary.

That mean they are also benchmarking the 6 sectors top earners performance and results?

So at that instant of comparsion,
the amount & the percentage rise of the output generated from the manufacturer sector compared to their last year......"

If they want to benchmark, then benchmark with actual reality that reflect majority of pay for particular job, not benchmark against bullshit and one genius in that job.

OUr ministers are nothing compared to work of genius ! Why compare our ministers to genius ?

Are they matching their salary to highest earners just because they think they elite and noone to stop them ?

How many percent of those people actually earn the pay of those benchmarked jobs ? If in rupiah, I believe, but if in Singapore currency, you must be joking.

Sze Meng says:"

KTM - I think the Government can take the lead to write the job description and persuade and convince the majority of Singaporean to accept it. politicas is also about persuading people, beside allocating resources."

So far, Sze Meng, did you in your knowledge recall an instance the gov did persuade and convince the majority or do so through using forced changes without public's choice ?

Politicas in Singapore is not about persuasion, it is about adapting and adopting gov's decision whether Singaporean like it or not. We truly have no choice. The gahmen only perceived an image that they given us choice.

Since when, People has the power to force change in gov ? Only the gov force change to public ! Those who try to do the former end up in exile or migration, or been discredit by gov, and even been sue to the last of the underwear.

The recent minister salary has been a hot topic. Both the government and the public have their fair share of view.

I think the ministers deserve to have the pay cheque they wanted but may have to accept to the conditions and term used private companies since we are comparing in this area and among the top guns there.

It is the same as a sales person who wanted the salary he think he deserve, the employer would have to put a higher revenue targets to this sales person tying the salary he demanded. It is up to the sales to prove his worth. If he make it, he gets what he wants, if he don't, the next better player would take over.

Base on this principle by the private companies, a systems might have to put in place where each minister would be given a revenue targets. As the government is not a profit orientation especially if you breakdown to each ministry. Only departments like GIC could be measure by profit targets but for department like HDB, some other form of targets could be evaluated. For example, $xxx cost reduction per HDB unit without compromising quality of the flat. The total expediture by HDB need to reduce by $xxx. At the same time, HDB should do certain projects like investing and helping other countries on building flats/condo overseas to bring in profits for HDB. In someway, they would behave like a private companies (especially on oversea venture) but on internal side they behave like a government where they focus on the people's welfare by reducing cost of flats to make it affordable. They should also leverage on the profit earn to help poor local Singaporean to own a flat. Though this would be a difficult targets calcuations, it may well be considered. The targets rightfully should not be set by the governements themselves but external parties. It could be the task given to opposition parties to seek external experts and consultant to set the targets. It would be the interests of opposition parties to ensure no compromise of interests while our government could negotiate the targets if they find the targets is a reasonable one.
If a minister fails the targets, chances would be given like in private companies, but if they miss it with a given chances, they have to pack and go. This is the way private companies works. No risk no gain.

The system ensure the best player stay in the game and only the toughest stay.In a scenrio like this, certificates is not longer the important component to stay in the game, it is the player's strategy and judgement that come into play. It would also help our government to identify who is suitable candidates in each department.
We can place a scholar in the army, but a good general may not be neccarily the one with the best certificate, it could turn out to be a less uneducated soldier who are able plan a war game. Not everyone is made a soldier, some talent comes inborn and such person just need to identified and nurtured put his/her potential into use and contribute to the country.

Lastly, we have to acknowledge that our government is doing a good job where high percentage of the citizens achieved the basic needs and in fact a higher percent should be in the higher level of the maslow's hierachy. We are all under pressure because of higher standard of living. This problem is faced by all countries. There is no perfect soultion to decisions and sometimes it can be a painful decision where it would benefit to majority but not minority.

Asking for a pay raise is always a challenge. It is the same in the private company. That is why there is job hop. However, no one is indepensible. Chinese has a saying, There is always a mountain higher than the current one, thus it there should not be worries of finding another talent - the question is how fast the replacement could be found.

Hi KTM,

The intrinsic value of ministers and civil servants comes to me as very high. I have no idea of how high I think of it, but certainly higher than any other job. Instead of seeing it as Mercedez and Rolex kway teow in canteen, it is more appropriate to say we hire an F1 driver (just to mean highly-skilled, experienced, best) in whatever car that best describes Singapore. Their service is invaluable just to avoid mistakes.

yizheng,

Thanks for your note. :-P Eh, who says kway teow in canteen is less important than an F1 driver? Everyone has a role in the circle of life and the KTM would be loathe to say that some occupations are more noble or important than others (Though the KTM must declare conflict of interest when speaking about kway teow frying). :-P

If you want to talk about F1 driving, fair enough. The same questions above will apply. Is a million-dollar surgeon necessarily a good F1 driver? How about a former pilot? Or maybe a bus driver or taxi driver? How do we know that a delivery van driver isn't a good F1 driver (anyone watched Initial-D)? :-)

There are actually many difficulties in this debate and the KTM does even know where to start. Ng suggested that we set KPIs for the Ministers. The KTM doesn't think that it's quite so straight forward. Corporations have it easy 'cos they have one common (and accepted) denominator and that's $$$$. Public service is a completely different ball game and to try to quantify good work in dollars and cents is asking for trouble in the KTM's opinion.

Economic growth is a completely lousy KPI because businesses run in cycles and while good governance helps, sometimes like Hong Kong, NO governance also works. Benchmarking to GDP is therefore like throwing darts. Similarly, benchmarking to the lowest 20% is like freezing pay. :-)

KTM,
you might want to bring your kway teow to other country, where your kway teow taste and skill is better appreciated in Chinatown somewhere in San francisco because your kway teow no longer can sustain our minister's appetite here.

With $2.2 million dollars in pocket, will the ministers care about your kway teow ? They only care how much will your kway teow contribute to their pay. Did your kway teow come special with high grade shark fin ?

KTM,

I'm not mistaking myopia for pragmatism (or practicalism, as it is used in the Singaporean context.) I'm saying pragmatism *IS* a form of myopia. Well, it does leads to obsession with benchmarks and KPIs. :/

It does sacrifice long-term potential for immediate gain:

E.g SMEs vs. MNCs (the pragmatic choice is actives policies that favour MNCs (pioneer certs and massive infrastructure projects). End-result: Over reliance on such policies, vulnerability to foreign investment flight and Singapore is still stuck in as an 'input-driven' economy despite all that 'knowledge-based' or whatever-the-latest-buzzword-is talk.)

I will further argue that 'pragmatism' is precisely what led to your sadness in the first place. Much of the unstable equilibrium you mentioned, is a direct result of 'pragmatism'.

To quote:

"Some people may be happy if the PAP loses, but these fellas have no idea what they are asking for. The current system is in an unstable equilibrium and if it topples, it's not going to have a hard landing (yeah lah, people will say it's PAP's fault, but it's also the truth) ... Stability is good."

See what I mean? Stability (a pragmatic choice, no doubt) is overrated. While the system may remain in equilibrium (short-term gain), it would also serve to entrench the 'unstable equi