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Singapore ministers get 10 percent pay cut - Rhetoric vs Reality

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  • Sg_Review@yahoogroups.com
    As massive pay cuts for our magnanimous self-sacrificing and selfless ministers are effective in July 2003, we re-circulate below for your reading pleasure.
    Message 1 of 1 , Jun 27, 2003
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      As "massive pay cuts" for our magnanimous self-sacrificing and selfless
      ministers are effective in July 2003, we re-circulate below for your reading

      The Rhetoric

      "When we have to take bitter medicine. We have to start at the top."
      - DPM Lee Hsien Loong on ministers taking a pay cut, Business Times, May 2, 2003

      The Reality

      "When asked how the pay cut would affect him, Mr Goh admitted candidly that it
      would have little impact as his children were grown up and his house paid
      for, "I do not speculate on the property market. I do not have any oustanding
      loans. I don't owe anybody anything. So what I have, I don't spend very much."
      - Straits Times, on how the 10% ministerial pay cut would affect PM Goh Chok
      Tong, Mar 23, 2003

      Singapore ministers get 10 percent pay cut as SARS ravages economy.

      22 May 2003
      Agence France Presse
      Copyright Agence France-Presse, 2003 All reproduction and
      presentation rights reserved.

      ATTENTION - RECASTS with pay cuts for civil servants ///

      Singapore cabinet ministers will take a 10 percent pay cut from July
      amid gloomy economic prospects because of the fallout from SARS, the
      government said Thursday.

      Other civil servants will have their monthly salaries cut by between
      one and nine percent, according to a government statement posted on
      the website of broadcaster Channel NewsAsia.

      The pay cuts were in response to a recommendation by the National
      Wages Council (NWC) for companies hit hard by the impact of Severe
      Acute Respiratory Syndrome (SARS) to cut salaries in order to save
      jobs and survive the crisis.

      The wage cuts, endorsed by the government, will be implemented for 12
      months from July this year to June 2004.

      Government ministers and other civil servants had their salaries
      trimmed in 2001 following a recession and the latest reductions would
      bring the total cuts for top officials to between 24 and 29 percent.

      Civil servants will receive their mid-year variable bonus in July but
      this will be smallest since the scheme was introduced in the 1980s.

      "The government will decide on the year-end payment for civil
      servants when Singapore's economic performance in the second half of
      2003 is clearer," the press statement said.

      Civil servants receive bonuses based on the performance of the
      economy, which is expected to grow between 0.5-2.5 percent, down from
      the original forecast of 2.0-5.0 percent.

      Cabinet ministers here are believed to be among the best paid in the
      region under a formula linked to private sector salaries deemed
      necessary to attract the best into public service and reduce

      Prime Minister Goh Chok Tong was earning more than one million US
      dollars during an economic boom in 2000, making him one of the
      world's best-paid leaders, before the 2001 salary cuts.

      Excluding the pay cuts coming in July, the Singapore leader still
      draws a gross annual salary of over 600,000 dollars a year. This is
      on top of variable bonuses linked to the performance of the economy.

      "The difficult situation of today and the uncertainty of what lies
      ahead calls for the implementation of painful measures," such as wage
      freezes and cuts, the ministry of manpower said in a statement
      earlier Thursday.

      It said the hardest hit sectors in Singapore are the tourism and
      transport-related industries. Visitor arrivals fell 15 percent in
      March when the outbreak initially kicked in and by a whopping 67
      percent in April.

      Companies not directly affected by SARS but also suffering from the
      impact of the difficult economic conditions were advised to continue
      to freeze wages.

      Other firms were urged to restructure their wage systems to include a
      monthly variable component.


      Commentary By: Mellanie Hewlitt
      Source: Singapore Review
      Date: 2 May 2003.

      The headlines blared loudly in the 2 May 2003 issues of the Straits
      Times and Business Times "Pay cut? Ministers ready to lead by example:
      DPM", announcing to the entire world this selfless act of leadership by
      Singapore's Ruling Elite.

      In what appeared to be an initial move to reduce severely inflated
      salaries, to more reasonable industry standards, Singapore's Ruling Elite
      have bowed to public pressure and hinted at accepting a pay cut.

      Or have they?

      What exactly does "Leading By Example" mean? Lets try to put some substance
      behind those brave words. As of last count, average take home pay of a
      Singapore minister was well in excess of SGD100,000/- a month.

      The below table puts things back in proper perspective:
      (these are basic figures as of July 2000 and did not include last year's
      pay hikes or other benefits. Otherwise the updated numbers may well be
      much larger)

      1. Singapore
      Prime Minister's Basic Salary US$1,100,000 (SGD1,958,000) a year
      Minister's Basic: US$655,530 to US$819,124 (SGD1,166,844 to
      SGD1,458,040) a year

      2. United States of America
      President: US$200,000
      Vice President: US$181,400
      Cabinet Secretaries: US$157,000

      3. United Kingdom
      Prime Minister: US$170,556
      Ministers: US$146,299
      Senior Civil Servants: US$262,438

      4. Australia
      Prime Minister: US$137,060
      Deputy Prime Minister: US$111,439
      Treasurer: US$102,682

      5. Hong Kong
      Chief Executive : US$416,615
      Top Civil Servant: US$278,538
      Financial Sec: US$315,077

      Source: Asian Wall Street Journal July 10 2000

      In relative terms, less then 20% of Singaporeans here have take home
      salaries exceeding SGD100,000/- A YEAR.

      SGD1,166,844 A YEAR, OR JUST UNDER SGD100,000 A MONTH.

      What these ministers earns in just ONE MONTH exceeds the ANNUAL TAKE HOME
      salary of 80% of Singapore's income earning population. Lets not even begin
      to compare annual packages which will exceed SGD1 million easily.

      With the above numbers and figures now in perspective, it is easier to give
      substance to the words "leading by example". Several facts are noteworthy

      a) That the ministerial salaries are grossly out of proportion, even when
      compared with their counterparts in much larger countries (US and UK) who
      have far heavier responsibilities.

      b) That these salary reductions were long overdue. In the past, such handsome
      remuneration were "justified" on the back of resounding performance. However,
      Singapore's economy has been in the doldrums of a recession for several years
      now (with beginnings reaching as far back as the 1997 Asian economic crisis).
      This economic barometer is a rough measure of performance and implies that
      ministerial salaries were due for review at least 3-4 years ago.

      c) That adjustments should be made to bring them back within the industry
      benchmarks. Taking the salary of US vice president as a rule of thumb, the
      percentage for reductions should start at 50% of current pay. Even if a
      Singapore minister takes a 50% pay-cut, he would still be earning much more
      then the US vice president.

      d) The percentage reductions should greater then 50% if the intent is to bring
      the salaries within the perspective of Singapore's domestic scene.

      With such inflated figures, it is understandable why the local government
      controlled media (Singapore Press Holdings) have taken pains to exclude
      mention of actual numbers for the world to see. The numbers would be too
      glaring and no amount of window dressing or creative writing could have
      reconciled these numbers with a sane figure and restored credibility.

      It is unlikely that Singapore's Ruling Elite will accept such huge salary
      cuts. Exactly How much and when the ministerial pay-cuts takes effect is
      not revealed. Ask any man on the street and 9 out of 10 responses indicate
      many agree the current ministerial salaries are grossly inflated, especially
      in these lean and difficult times.

      Said a long time forumer from an internet political chat group:
      "First of all the Ministers are NOT leading on pay cut. Workers' salaries
      have been drastically reduced since the beginning of the recession while
      thousands have been unemployed. so the Ministers are NOT LEADING. they are
      only CATCHING UP. And they have several decades to catch up on."

      "Secondly, how much of a pay cut will Ministers take? 10%? 20%? unless its
      a cut that will affect their lifestyles, it is merely symbolic and they would
      still not know what it feels like to be a normal worker. as such, this is not
      Leading by Example. Its just another bogus political propaganda stunt"

      A 29 yr old executive who requested to remain anonymous admitted
      sheepishly ;
      "The numbers (ministerial salaries) are a national embarrassment really,
      because it reflects the underlying materialistic value systems of Singapore
      Ministers. No matter how you look at it, the fact remains that our ministers
      are money faced, and these are supposed to be Singapore's leaders, with value
      systems that Singaporeans should follow."

      "It (the ministerial salaries) puts Singapore in a bad light in the eyes of
      the world. The rest of Singaporeans really put in an honest days work for every
      penny they earn. And the process for review and approval of the ministerial
      salaries is also a joke. Imagine sitting on the board and approving (on White
      Paper)your own salary increments! Its all a wayang show".

      This also raises the question as to the authenticity of the actual process
      for review and approval of cabinet minister's salaries. Who decides on these
      numbers? Is there independence and transparency?

      Veteran opposition figure J.B. Jeyaretnam on Wednesday, Nov 20, 2002 challenged
      Singapore government ministers to take a pay cut to show they understand the
      economic hardships faced by the public. And the over-riding concern is that
      Singapore's Ruling Elite are unable to appreciate the economic hardship that
      the masses face in these tough times.

      The growing public resentment comes afew months after PM Goh's careless
      comments that "lay-offs were notall bad", drew a backlash from the public with
      a flood of e-mails being sent to the foreign press to register public

      Singapore Review welcomes honest feedback on this hotly debated topic.

      You can Send your comments to the editor: Sg_Review@yahoogroups.com


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