Friday, May 18, 2007

Singapore PM to freeze his pay for 5 years, donate pay hikes

Singapore PM to freeze his pay for 5 years, donate pay hikes
Posted: 11 April 2007 1643 hrs

Prime Minister Lee Hsien Loong says he will hold his own salary at the present level for five years and will donate any increases in his salary during that period.

He made the announcement in Parliament on Wednesday, as the House continues its debate on salary revisions for government ministers and civil servants.

Mr Lee said making a large adjustment in public sector salaries now is politically a most difficult decision.

But it is something that must be done.

While it is very difficult to get people to understand and emotionally accept it, he said the issue is absolutely critical.

"If we do not tackle it now, the problem will not go away; it will just get worse - we will be in serious trouble," he said.

After discussing it at length in Cabinet, and with Senior Minister Goh Chok Tong and Minister Mentor Lee Kuan Yew in particular strongly encouraging him to do it, PM Lee decided to move now because of the overriding importance of keeping public sector salaries competitive.

The Prime Minister said that to make clear why he is doing this, and to give him the moral standing to defend this policy to Singaporeans, he will hold his own salary at its present level for five years.

The Government will pay him his full pay, because that is how the system must work.

But for five years, he will donate the increase in his salary from this and subsequent revisions.

Mr Lee said he does not expect other Ministers to follow.

While it is a Cabinet decision, he told Parliament, he is carrying the ultimate responsibility, not them.

So what the individual Ministers and MPs do is up to them.

Mr Lee said that he knows they already support various worthy causes.

It should not be a public ostentatious display of how generous they are, but a private matter for them to decide at their own discretion, he said.

Mr Lee told the House that the issue is not just about salaries of Ministers and civil servants.

It is about Singapore's future - how it can produce the best government to secure a bright future for the people.

He explained that a strong political leadership and effective government will not happen automatically or by chance.

It only happens through a deliberate, systematic process to build the team and to bring in talent.

But it did not start out like that.

Minister Mentor Lee and the first generation of leaders went out systematically building a successor team.

This approach worked with a second generation of leaders, and now a third.

Citing examples like NEWater, which turns a strategic vulnerability into a competitive advantage, education, and a clean and non-corrupt government, Mr Lee said that Singapore's system of government has delivered results.

To sustain the system, the country must build the strongest possible team in Cabinet and government to govern and serve Singaporeans now and into the future.

He told Parliament that building the next team is his most important task.

Citing the example of Law Minister Professor Jayakumar, who is now 67, Mr Lee said he must have a successor ready by 2011.

The Prime Minister himself is 55.

So he must find and bring in a whole team of new MPs and political office-holders.

Mr Lee said that he wants to be able to assemble together the best possible group of young persons, who are now in their late 30s or early 40s, so they can offer Singaporeans the best choice.

10 years from now, one of them should be ready to take over as PM.

One key requirement, Mr Lee said, is to pay people properly.

He stressed that while the government does not expect Ministers to earn as much as the top earners in the private sector, it must not be too far out of line from what a person of similar ability can earn outside.

He also explained that the formula for benchmarking public sector salaries to the private sector is basically sound.

Mr Lee did not agree to a suggestion to delegate the responsibility of deciding Ministers' pay to an independent pay commission.

He said this will not settle the matter as finally, the responsibility lies with the political leadership.

It is accountable to Parliament and to all Singaporeans, who will have to judge and decide whether it has done the right thing.

To comments by opposition member Low Thia Khiang, he asked the Workers' Party chief to produce his line-up of Ministers and say how much he intends to pay them.

While Mr Lee conceded that his present team is not perfect, he said every Minister is worth his pay, and by paying properly, the team can be improved and strengthened.

Other countries also face similar problems over the pay of political leaders.

Some try to benchmark public sector salaries to the private sector, but have not succeeded.

Mr Lee acknowledged that despite all the arguments, the policy is not easy for people to accept.

The income gap is widening and although the economy is doing well, some people still face difficulties.

Mr Lee also agreed that it is not a good time for a salary revision when the GST has just been raised and not everything is rosy in the economy.

He said he had considered waiting one year, but the problem is urgent.

Since the last adjustment in 2000, private sector incomes have surged ahead.

Waiting one year would mean having to make a bigger move.

Meanwhile, the government will lose people.

Hence it must move now.

Also, it must keep on adjusting as the private sector moves.

Mr Lee made clear this policy is for the future, against the backdrop of the new globalised Asia.

He said the test is not whether these Ministers will leave, but whether there will be good Ministers in Singapore in 10, 20 years' time.

The Prime Minister said he is convinced the government has made the right decision. - CNA/ir

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