Why would the MPs do that? Right after the ministers' pay rise comes the rise is MPs' allowances. Then comes the President's pay rise. Then the cycle is repeated. They all take turns giving each other pay rises so that no one gets left out and becomes uncompetitive. This is what our system of checks and balances have become. More good years for our rulers!

Hi!

I found this part about "Inability to attract top talent" very disturbing. Why should Singaporeans pay so much so that PAP can get "talented" people to join them?

It will be great if they reveal all these information. However, juding from their past practices, I doubt they will disclose them.

One can always hope - or maybe we can write directly to the MP who represent us in Parliament to do so.

I believe the President compensation is the highest, even highest than PM, SM or MM. Can someone correct me if I am wrong. If the MR4 increases, the President compensation will have to increase. For the MPs, I wonder what is the justification for their allowance of ~$11,000 MONTHLY.

I find the issues you touched upon as very valid and 'solid'.

The pay increase package is out today. It is very difficult to know and swallow, what candies have the MPs have catered and kept for themselves.

For the fact that these ministers made it possible for us to remain as a competitive nation, they deserved to get these returns? But did anyone forget, the ministers can claim whatever credits they want, try to implement whatever system they desire, it is our forefathers, parents and us that played an important part to make what we are today. The credit does not go to the ministers only.

Why are they using 'dollars and cents' to attract whatever talents available out there? Is the goverment looking for individuals who are more keen to line their pockets, or only those who is really keen to bringforth, lead us and work with us and forge for a better future.

We are not saying the ministers should be paid miserably, the present pay package they are enjoying at present is less than miserable. But in fact is already handsome enough that not many can dream to earn.

With all the inflating costs in our daily lives, increase in ERP, GST, etc etc... The next thing the government does is to line their pockets and give us such lame excuses for the adjustment. Is the government more concern on their pockets, or the welfare of the nation and its people? Why in the first place is the government pegging their pay-check with that of individuals in the private sector, when in the first place are we the same as that of a company, and not a nation? Or probably the person in charge of this government actually thinks of us as a company... and what they have done for this "company" is only and solely for their personal benefits

Charissa has brought up a valid point. Currently it seems a lot like the people bearing the cost of one political party's inability to attract talent.

THe inability of PAP to attract top talent begs this question, is it necessary for one party to have a monopoly on "talent"? And what are the implications of one party monopolising talent?

Ned Stark: Do you think the PAP has a monopoly of talent now?

Sze Meng,

As to to the reality, i am not so sure for now. However I do know for a fact that the PAP has relied on coopting to bolster its ranks from time to time (eg Mr Vivian Balakrishnan and some others whose names i cannot recall at the moment). From that i infer that they do have the intention of having a monopoly of talent. However with regards to your question its hard to say whether the new batch is "talented" or not.

Sze Meng,

one issue I have with the approach espoused by your initial post is that it is an inherently reactive approach. If we wait for a situation when 2/3 "minister-calibre" candidates either decline to join or leave politics each election, it will be problematic. Also, the lack of corruption is something we shouldn't put at risk. CPIB can not prevent corruption - it can deter and discover.

Also, I very much doubt any candidate going for a "tea-session" would say that they don't want to run for election due to monetary issues. Even if they thought that, how many guys are honest enough to say it to the PM?

Having said that, I probably agree that this really isn't a big problem yet. The toughest part is to convince the 30-32 year old officers to stay in the civil service, or to enter politics. They weren't kidding when they said that tons of folks left in the past, and continue to do so. The problem is when the number of people leaving is significantly higher than what they have expected.

In the end, it's probably best to follow their tactics - when the economy sucks, people prefer the perceived security of a public sector job. When the economy is hot, the private sector pays better. So timing-wise they have it right from a policy viewpoint.

As for others like Disheartened who think that gov't officials are no-marks who want to line their pocket, well, no rational argument will appeal to you. Politics is somewhat about the art of convincing others that your policies are right. And despite what many think, there is a correlation between what a man earns and his general abilities. There are ministers and PSes who aren't that good - but if you tell me that increasing the pay gives us a 5% chance higher of landing another Lim Siong Guan (or at least preventing the next LSG from leaving for the private sector) then it is money well spent.

There is no certainty that this will work, and it is pretty damn convenient for people that benefit from it, but as a policy, I think it is one that will pay off in the long term. But despite all the debate and bluster, I think they still failed to sell it convincingly.

Maybe I just don't find 2.2 million a year to be extravagant for someone who is a true talent. Having said that, I'm not sold that everyone getting big money deserves it. In my opinion, I would say that at least 90% of appointment holders (MOS and up) and 80% of PSes are very good at what they do. That's a better ratio than many MNCs, by the way.

Siu Taur - hope you are doing well in your new career!

"Also, the lack of corruption is something we shouldn't put at risk. CPIB can not prevent corruption - it can deter and discover."

CPIB cannot prevent corruption, but isn't the threat of being discovered a preventive measure too?

Going along the assertion of paying to prevent corruption then, is paying $1,200,000 a year not sufficient to prevent corruption, and $1,600,000 or $1,800,000 a year will have a statistically significant differences in preventing corruption?

Does top talent really need so much money not to be corrupt? I think there is a number somewhere when the compensation is not the key driver to prevent corruption. ( I am sure there is a mathematical technical term for that =))

If someone is paid $1M a year and still want to be corrupt, does paying the person $2M a year really make a differences? The Enrons, Worldcoms C-level executives are paid in tens of million, but it doesn't seem that prevent them from being found guilty of insider trading to make more millions. (Insider trading is an unethical and unlawful way to make more money.)

I am not entirely convinced that paying more than $1.2M a year will prevent corruption. $1M or even $500,000 a year seem like an amount that anyone can live comfortably in Singapore.

I just think it is a weak argument to assert that if we don't raise our minister salaries from $1.2M, we may land up with a corrupted government somewhere down the road. I don't think raising the salaries of someone earning $1M a year will really make a difference if that someone wants to be corrupt in the first place. If someone may be tempted to be corrupt if his or her salary is $1.2M a year, I am not sure paying $1.8M a year makes that much a difference.

There are better ways to prevent and deter corruption than raising an individual compensation from $1.2M to $1.8M. If we agree that this increase will marginally reduce corruption, then I will prefer the government not use this line of argument (especially if they cannot argue for it with data points or comparative analysis)

Having more check and balances on an institutional level may be more helpful in preventing corruption than raising salaries from $1.2M to $1.8M.

I agree with you that we must pay well to get good talent, but I am not sold on the current arguments being put forth without more data. That's really it. I understand the principle behind the pay increase as I have to prove myself daily in the private sector to justify my pay, but the data presented during the parliamentary debates do not answer some of my questions which I wrote to Today.

I heard that LSG donates most of his salary away anyways, so not sure if raising the salaries so high is critical in attract talented individuals with the level of character and integrity of LSG. It may be actually counterproductive. =)

That said, I want to state categorically that I personally believe our top political leadership and civil servants are amongst the least corrupted in the world based on my observations.

I am just not (yet) convinced of the arguments put forth by the government due to the lack of relevant data points.

Siu Tar,

"Having said that, I'm not sold that everyone getting big money deserves it. In my opinion, I would say that at least 90% of appointment holders (MOS and up) and 80% of PSes are very good at what they do. That's a better ratio than many MNCs, by the way"

What data do you have to assert that the Singapore political appointment holders and PS ratio in deserving their pay is higher than the global MNCs? This assumes your 90% and 80% ratios are accurate.

I am curious where you get the data from?

For the top tier management in global MNC earning more than US$1M a year, these top executives are almost ask to leave relatively quickly (

I think there is sufficient body of research done to show that C-level executives are asked to leave relatively quickly due to poor performance. Another driver is the many private equity buyouts where many MNC are now in the hand of the pe firms. The senior managers in these firms are as good as their past 1-2 quarter of performances.

I will personally feel more comfortable stating the converse which is that many global MNCs has a better ratio.

You state" Also, I very much doubt any candidate going for a "tea-session" would say that they don't want to run for election due to monetary issues. Even if they thought that, how many guys are honest enough to say it to the PM?"

I think candidates who are not honest to state their true reasons shouldn't stand for high office anyways. I do think the caliber of people who asked to run for high office will feel perfectly comfortable calling a spade a spade to the PM, and just say that they are not willing to give up $XM a year to run for office. Nothing wrong with that.

My question is whether paying these individuals $600,000 a year more will convince these individuals when their outside compensation is already definitely >>> $1.2M a year?

I understand the argument is to make the pay cut less painful.

I am just curious if someone earns $1.8M a year, getting a pay cut of $0.6M a year is painful enough for the someone to reject an opportunity to serve the country in high office.

If I earn $10K a month, getting a pay cut of $3K is material. When you earn $150K (assume $1.8M a year) a month, getting a pay of $50K and being paid $100K a month (assume $1.2M a year) will be as painful? I think the marginal utility of the next dollar earned for someone earning $100K a month is much lower than the marginal benefit of someone earning $10k a month. When you have $100K a month, having the dollar more is worth much less than someone who has $7K a month.

If we have to increase pay to convince someone who is already earning $150K a month, and asking someone to now be paid $100K a month to serve high office, I am not entirely sure I want someone who is really that attached to $50K differences a month to be my minister.

Is $100K a month really that insufficient to live a decent life in Singapore? Maybe a 50K a month more salary allows someone to buy a better version of a private plane or one more holiday chalet in the Caribbean?

The trade off is the opportunity to shape the policies and impacting the lives of your fellow citizen vs $50K a month loss with a $100K salary assuming there is some desire to serve.

If the individual have little desire to serve, paying the individual much more money to do so may be counterproductive. Adverse selection process may result when talented individuals want to serve because of the monetary benefits.

Too much money to convince someone to serve may reduce the amount of desire needed for any individuals to make a decision to serve in high office in the future.

At a certain point, we need to take a step back, look at the actual amount we are talking, and evaluate the marginal benefit of paying someone $50K more a month for someone who will be paid $100K a month.

I think the ministerial pay increase have been framed by the government as paying top money for top talent which is hard to dispute.

A more productive and helpful discussion may arise if we can re-frame the discussion whether Singaporeans should pay someone already earning 100K ($1.2M a year) a month another 83K/month ($2.2M a year = $183K/month) more to serve the people of Singapore as a Minister.

Is $100K a month insufficient, and if so, why? We are not paying our top political leaderships poorly by any measure of imagination right now. Is it helpful in the long run to pay someone who could earned $100K a month another $83K a month to be a Minister?

Sze Meng,

let me address your points, not necessarily in the order which you made them but in a cogent manner.

1. That earning $X is sufficient because it allows you to live comfortably etc. Hence there is no need to pay more than $X. There's no real way to dispute this because different people have different standards of comfortable. We'll have to agree to disagree. All I can say is that it is easy for the people to ask that others make sacrifices on their behalf. In any case, who decides what X is? (see pt 3 below too)

2. That the marginal utility from this pay increase is less than the marginal cost, or that it may even be negative given the political costs and the chance of attracting money-grubbers. This is a valid point, but that's a policy decision. I happen to think that ministerial salaries are still low enough that utility is positive in terms of attracting better candidates, and that the true money-grubbers would not find public service lucrative enough. Your mileage may vary.

3. Higher pay is neither a neccessary nor sufficient condition for reducing corruption. That is true. But I think we can agree that some correlation does exist. Beyond $X, you probably prevent endemic corruption and only have isolated cases. Again, who decides what $X is? It's a policy decision, a benchmark has been created. We can argue whether it is an appropriate benchmark. But the Gov't has on occasion frozen the benchmark, so it is more of an upper-bound. (I think that given 2 weeks of thought, I could come up with a better benchmark. But then again, we all think that we are very smart)

4. Executive pay in MNCs. If the private sector was really so all-seeing, there would not be consultants. 'nuff said. Private sector people may have to earn their keep, but don't underestimate the workload of the ministers/PSes. An incompetent junior minister will not be promoted and is often asked to leave. Poor AOs do get pay-cuts. It's just that they have a chance to save face. (of course, top executives get a golden handshake to lessen the pain of losing face)

In the end, your premise is that more info is needed. I'm merely saying that gathering that info may be an extremely costly exercise...

At the end of the day, policy decisions have to be made, not shirked. While not all policy decisions are of the highest quality, we can agree that they are made in good faith and for me, that is worth something.

Siu Taur,

Thanks for the replies, and I absolutely agree we can agree to disagree. I think the premises of your arguments are that you have a lot of good faith in the current administration, and I don't deny that the current administration is worth its pay to a certain extent.

My concern is what's after this pay hike. Of course everyone differs on the $X to prevent corruption and live comfortably. Some think $X is 10K a month, some think $X should be $150K a month.

The government, public and the exact talent pool the government is trying to attract has different idea what this $X is, and the gap between the government $X and other Singaporean perception of $X is what's worrying.

I doubt many in the middle class earning $4-6K a month will think that $100K a month is not sufficient to prevent systematic corruption or to live comfortably in Singapore.

Yes, one can argue that some/many Singaporean don't understand or appreciate the fact that top talent can command these salaries or higher. Then it is the job of the government to convince otherwise.

I am saying that the government has not given me enough data to be convinced entirely. My perception is that you are convinced by the arguments and data to support the arguments put forth by the government.

I agree the private sector is not all seeing (of course not!). However, I do think at the most senior management (which is comparing apple to apple to the PS and Ministers), the private sector has a short tolerance for poor performances at the most senior management. Middle management in both private and public sector is another story. Remember the public sector also ENGAGE consultants - which does not mean that the public sector leaders who engage consultants are not performing too?! You seem to imply that not so effective leaders engage consultants....No one is disputing that the PS and AOs are not earning their keep.

The perception and reality is that the civil service has better job security and it is more accurate to say that the civil service has better job security than the average private sector company (obviously family run private sector firm may have better job security).