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Generous Remunerations In Singapore's Civil Service/Ministers

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  • LEE HAN SHIH -SPH
    Article By LEE HAN SHIH Source: The Business Times Date: 27 Feb 2003 Commentary: Mellanie Hewlitt HDB, don t be so generous to transferred staff THE Housing
    Message 1 of 62 , Feb 26, 2003
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      Article By LEE HAN SHIH
      Source: The Business Times
      Date: 27 Feb 2003
      Commentary: Mellanie Hewlitt

      HDB, don't be so generous to transferred staff

      THE Housing and Development Board has said it will trim perhaps 2,700 people from its workforce of more than 8,000. But amazingly, HDB does not expect to retrench a single person.

      The key is a $100 million package for staff who opt to 'retire' from the housing board. Each will get a month's pay for every year of service, except those who have worked for less than three years and those whose mandatory retirement is less than 18
      months away.

      A month's pay for a year's service may not be unusual, although in today's dismal economy, not many private sector employers can afford to give that. But even those who do often cap the amount - to say, 24 months.

      Not so in HDB's case. There is no cap for those who are eligible, and some older staff will walk away with more than 36 months' pay, come July 1.

      But that's not the most amazing part. The retirement package is being given not only to the 900 or so who choose to leave the housing board, but also to a larger number, some 1,800, who are staying behind but will be transferred to a new subsidiary called
      HDB Corp.

      In all, some 2,700 will leave HDB proper. Their departure will cost $100 million or more, including an estimated $450,000 per head offered to a few senior staff.

      If all this sounds generous, it is. Giving benefits to transferred employees is unheard of in the private sector. After all, retirement benefits are given to those who no longer draw a salary from a company. If employees get to keep their job, is there a need to give them the same benefit?

      Neither HDB nor its parent, the Ministry of National Development, offered an explanation. The move will underline the perception that agencies like HDB offer an iron rice bowl, providing job security with a salary matching or exceeding that in the private sector.

      HDB Corp is a different story. This new company will get the exclusive right to design and develop public flats for a few years, after which it is expected to compete for jobs with private-sector rivals.

      As a privatised company, albeit a subsidiary of HDB, HDB Corp will be subject to market forces and its staff will not be on civil service employment terms. Salaries are very likely to be lower and jobs may be lost when the going gets bad. The benefit given to the 1,800 staff transferring to HDB Corp is, therefore, not so much to compensate them for 'retirement' - they are not retiring - but for loss of job security. This is the biggest, most glaring difference between the public and the private sector.

      In the private sector, job security is never taken for granted. If your company does badly, you are lucky to keep your job. Few complain about a pay cut - at least, not openly - because everyone knows this is the way the market works.

      But in the public sector, not only is there job security but if your employer does badly and you get transferred out to a privatised entity - you get a retirement benefit.

      Don't blame HDB for doing this - it is following procedures laid down by the civil service's special resignation scheme or SRS. When other government departments privatise subsidiaries, their affected staff can expect the same generous treatment.

      This has far-reaching repercussions.

      The government is redefining the role of the civil service, with the aim of keeping statutory or regulatory functions in-house while outsourcing service functions (such as designing and building public flats) to the private sector.

      The cost of doing so, under SRS, could come to billions of dollars.

      No one begrudges the 900 HDB staff getting retirement packages. But should taxpayers' money be used so the 1,800 who are keeping their jobs get the same treatment? Ask anyone in the private sector: the answer is likely to be no.

      Why not modify the scheme and delay paying retirement benefits to those going to HDB Corp until (and if) they lose their jobs?

      This way, HDB staff who truly need the benefits will still get them, and at the same time the government will be able to save a lot of money for other, more urgent uses.

      Surely this is appropriate in today's climate.

      --------------------------------------------------------------------------------

      Commentary: Mellanie Hewlitt
      Source: Singapore Review
      Date: 27 Feb 2003.

      It was only yesterday (26 Feb 2003) that the US (and the general public) was calling for greater transparency and accountability in management of GLCs and state owned entities, especially in regards to public funds. Dominance of GLCs is a worry for US firms, Lavin says US companies want greater transparency in S'pore govt procurement.

      Latest management decision in HDB, the city-state's Housing Development Board (a government body which provides public housing), confirm this need for transparancy and accountability.

      Only in Singapore's civil service bureucracy will it ever be possible to retrench 2,700 workers, without having to actually lay-off a single person. The trick lies in a game of "musical chairs" wherein "retrenched workers" are transferred to another arm of the government, at same pay packets. And the icing on the cake is that they get to collect their retrenchment benefits on top of their existing pay packets. All this of cause is at the expense of tax dollars.

      This concept of "musical chairs" has long been in practise amongst senior civil servants and politicians in Singapore who conveniently re-locate themselves between GLCs and State Runned Enterprises. It is already public knowledge that Singapre has the highest paid ministers and senior civil servants in the world. Indeed the Ruling Elite are at pains to keep the actual numbers of their obscene pay-packets from the eyes of the public. But this source of public embarassment has been an open secret for many years.

      With retrenchments and pay-cuts rampant all over the island, and the city state caught in the grips of a pro-longed recession, the latest move by HDB management can best be described as baffling.

      It again relates back to an issue that has been avoided by the Ruling Elite;- the management of public funds. This is a significant issue as there is an estimated USD100 billion approx in foreign exchange reserves and public funds, which are at the back and call of the PAP. And these are not subject to any known process of audit, disclosure or independent scrutiny/review.

      Read on and find out more about the latest travesty in management of public funds;

      1. Singapore
      Prime Minister's Basic Salary US$1,100,000 a year
      Minister's Basic: US$655,530 to US$819,124 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


      Subject: FW: LEGITIMIZED CORRUPTION

      --------------------------------------------------------------------------------
      July 10, 2000


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      Singaporeans Protest Pay Increases
      Granted to Government Officials
      By SARA WEBB
      Staff Reporter of THE WALL STREET JOURNAL


      SINGAPORE -- Hefty pay raises awarded last month to what are already some of the
      highest-paid government officials in the world have sparked a rare display of
      public indignation here, with Singaporeans criticizing the move on the Internet
      and even in the normally pro-government media.

      Under the new pay scale, Prime Minister Goh Chok Tong will see his annual salary
      increase 14% to 1.94 million Singapore dollars from 1.69 million Singapore
      dollars (US$1.1 million from US$971,264), while the salary for the most junior
      minister will increase 12% to S$968,000, putting Singapore's ministers well
      ahead of their counterparts in the U.S., the United Kingdom and many other
      countries in the salary league tables.

      Join the discussion: Are civil servants paid adequately for what they do?

      The pay raises, which follow a two-year pay freeze, come at a time when many
      Singaporeans feel they are still worse off than they were before the Asian
      financial crisis of 1997-98. During the crisis the government cut employers'
      contributions to the Central Provident Fund -- Singapore's compulsory savings
      scheme -- by 10 percentage points, and many Singaporeans are upset that this cut
      has been only partially restored despite the economy's revival.

      "The disturbing part of this latest pay revision is that it is undertaken while
      the majority of Singaporean workers are still being told to be patient about
      their CPF restoration ... . As leaders of a country, money is not everything,"
      said Chong Wee Lee in a letter to the Business Times.

      The government brought out its heavyweights -- Prime Minister Goh, Deputy Prime
      Minister Lee Hsien Loong and Senior Minister Lee Kuan Yew -- to argue for the
      raises in Parliament.

      Five Plates of Fried Noodles

      The pay increases work out to S$11 a year per Singaporean, equivalent to "about
      five plates of char kway teow [fried noodles] per Singaporean," noted Mr. Goh in
      defending the S$34 million cost of the pay raises for political office holders.
      Citing the glowing evaluations by international organizations of Singapore's
      economic competitiveness and the effectiveness of its government, Mr. Goh asked
      Singaporeans to judge his government by its record.

      Singapore came through the financial crisis in far better shape than many other
      Asian countries, but its economic growth did slow in 1998 to just 0.4%.

      Meanwhile, Lee Kuan Yew and his son, the deputy prime minister, told Parliament
      that it was necessary to pay civil servants higher wages in order to discourage
      them from leaving the service to pursue other, better-paying careers, and to
      encourage bright young Singaporeans to consider working in the public sector.

      "That period of revolutionary change that threw up people with deep convictions
      and overpowering motivation is over. We are in an era of high growth, with
      fortunes being made by the enterprising," Senior Minister Lee told Parliament.
      "Do not believe that we have escaped the problems that have plagued the region
      for corruption, collusion and nepotism. Our market-based pay and
      allowances will give no excuse for any slippage."

      High Pay, Low Corruption

      Singapore consistently scores high in international surveys for clean,
      corruption-free government, a result that is often at least partly attributed to
      its high government pay.

      Singapore's new salaries were calculated according to a complicated benchmarking
      system based on the income of the top eight earners of six well-paid
      professions.

      Citizens in any country rarely think their government officials should be paid
      more, and Singapore is proving to be no exception. A poll conducted by AsiaOne,
      the online version of the Singapore Press Holdings newspapers, asked readers
      whether "Singapore's ministers and political appointment-holders should continue
      to receive high salaries" and found that 69.4% disagreed, while only 24.3%
      agreed and 6.3% couldn't decide. The Straits Times newspaper conducted a street
      poll, and found that out of 150 people interviewed, 55% said increasing a junior
      minister's pay to S$968,000 wasn't fair. Asked what would be a fair salary, the
      answers ranged from S$180,000 to S$600,000 a year.

      The Straits Times also interviewed government workers who had recently left
      their jobs and found that money wasn't the reason for quitting -- they simply
      wanted a more interesting job. The newspaper found that some had left to work
      for less money outside the civil service, and that higher wages wouldn't have
      made any difference to their decisions. Marcus Yong, 26 years old, a former
      assistant director at the Ministry of Trade and Industry, was quoted as saying
      he would have left no matter how large the pay increase was because he preferred
      to be a player in the business world to operating behind the scenes in
      government. Others who left to join Internet companies said that though they
      earn less now, they had wanted to break out of "the comfort zone" and be a part
      of the New Economy.

      --Lingling Wei in Hong Kong, Puspa Madani in Jakarta and Josephine Cuneta in
      Manila contributed to this article.

      Write to Sara Webb at sara.webb@...
    • SDP
      Any one these days can promise the havens and the earth......but delivering on the promise is another thing altogether. Some examples of unfulfilled
      Message 62 of 62 , Mar 8, 2003
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        Any one these days can promise the havens and the earth......but delivering on the promise is another thing altogether.

        Some examples of unfulfilled promises....;

        JUDGE MY GOVT BY ITS RESULTS: PM Goh Chok Tong

        The Rhetoric

        "The price of a good government is $34 million a year - just $11 per
        Singaporean a year - or the cost of five plates of char kway teow per
        citizen."
        - Straits Times, July 1, 2000

        "A million dollars for a minister seems a lot when compared with the
        salary of a worker. But $34 million for all the ministers and
        political office-holders is a tiny drop when compared with the
        increase in GDP that a good government can produce..."
        - PM Goh Chok Tong, Straits Times, July 1, 2000


        The Reality

        The Singapore economy contracted by 2% in 2001 (Singapore Department
        of Statistics). Singapore has undergone two recessions in three
        years - 1998 and 2001. December 2001 figures show that 101,800
        persons are unemployed.
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        SIZE DOES MATTER

        The Rhetoric

        "GLCs added only 12.9% to the Singapore economy, says BG Yeo. Smaller
        companies need not worry about being edged out."
        - Straits Times, February 24, 2001

        "...there is a perception that GLCs dominate our economy...This is
        not correct."
        - MTI Minister George Yeo, Straits Times, Feb 24 2001

        The Reality

        "The government external economy constituted more than 50% of the
        total external economy in 1998. If one takes into account the GLC-
        owned external economy, then the government share balloons to some
        60%. Foreign MNCs accounted for 29% whereas the local private sector
        (excluding GLCs) owned 11%. It is therefore clear that if the
        government and GLCs fail to secure a good return on their external
        economy, the performance of the economy overall would be adversely
        affected."
        - Morgan Stanley report "Singapore's Investment Abroad 1997-1998"

        "GLCs have evolved into major economic institutions that account for
        over 60 percent of Singapore's GDP."
        - US Embassy in Singapore economic report Sept 2000

        "GLCs estimated contribution to GDP in 1998 of 12.9 per cent was not
        insignificant."
        - Singapore Department of Statistics, March 2001

        --------------------------------------------------------

        LABOUR CHIEF WANTS TO LOWER YOUR WAGES

        The Rhetoric

        "A worker in Singapore will cost $1000 per month or more, but there
        is a bountiful stream of workers in China who will gladly work for
        $100 per month ... that is why we should lower our wage costs."
        - Labour chief Lim Boon Heng, Straits Times, June 17 2002

        The Reality

        "Singapore ninth most expensive city in the world."
        - Economic Intelligence Unit, Jan 2001

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        A tale of two salaries

        The Rhetoric

        "This stingy government of ours is paying me only RM16,000 a month to
        do two jobs."
        - Malaysia's Prime Minister and Finance Minister Dr Mahathir Mohamad,
        Straits Times, 25 Nov, 2002

        "A million dollars for a minister seems a lot when compared with the
        salary of a worker. But $34 million for all the ministers and
        political office-holders is a tiny drop compared with the increase in
        GDP that a good government can produce."
        - PM Goh Chok Tong, Straits Times, July 1, 2000

        The Reality

        "Malaysia's economy expanded by by 5.6 per cent in the third quarter."
        - Straits Times, Nov 28, 2002

        "Singapore may face its second recession in two years."
        - Straits Times, Nov 19, 2002

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        FATHER & SON ON JBJ

        The Rhetoric

        "If you are Singaporean, you should stay on and fight and argue your
        case and persuade more people to believe you and one day change the
        policy, not opt out and leave because no policy is set in stone
        forever."
        - DPM Lee Hsien Loong praising J.B. Jeyaratnam as an example of
        a "stayer", Straits Times, Oct 3 2002.

        The Reality

        "Look, Jeyaretnam can't win the infighting. I'll tell you why. WE are
        in charge. Every government ministry and department is under our
        control...I will make him crawl on his bended knees, and beg for
        mercy."
        - Lee Kuan Yew on JB Jeyaratnam, 1981, as related by ex-President
        Devan Nair in this article

        During a 1986 inquiry into whether he had violated the Parliamentary
        Privilege Act by questioning the integrity of judges, Jeyaretnam
        asked Lee, "So you think I have to be destroyed?" Lee
        replied, "Politically, yes."

        --------------------------------------------------------------

        ONE FAMILY?

        The Rhetoric

        "We all are one family."
        - PM Goh Chok Tong, August 9, 2001

        The Reality

        Between 1998 and 1999, the average household monthly income of the
        poorest 10 percent of the population decreased by nearly 50 percent
        from $258 to $133. In the same period, the incomes of the richest 10
        percent increased by 2.6 percent from $15,053 to $15,451.

        The following year, the average household income of the poorest 10
        percent fell by another 54 percent from $133 a month to $61. In the
        same period, the incomes of the richest 10 percent increased by
        another 8.8 percent.

        ---------------------------------------------------------

        CHU MEI-FENG AND LEE KUAN YEW

        The Rhetoric

        "I believe we've got a responsible press. They are not ashamed of
        what they are doing.."
        - Mr Lee Kuan Yew on the press in Singapore.

        The Reality

        "Mediacorp TV has been fined $10,000 for airing "sexually suggestive
        and offensive" footage from the sex-scandal video of Taiwanese
        legislator Chu Mei-feng."
        - Straits Times, Feb 23 2002

        "Our dear opposition "rebel" Chee gets sued for defamation for asking
        about the 10-billion dollar loan, is denied the right to speak up in
        support of the Malays in the tudung issue, and gets only a few
        minutes to speak on TV. Instead the current Miss World Wh*** Chu Mei
        Feng got a whole half-hour slot on Channel U on Friday to highlight
        her arrival in Singapore AND WAS GIVEN THE RIGHT TO PERFORM on stage.
        What a joke Sillypore has turned out to be."
        - A (pissed-off) forumner on the Internet

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