Channel NewsAsia: National education has failed to create public-spiritedness: Sylvia Lim

By Hoe Yeen Nie


Sylvia Lim

SINGAPORE : Non-Constituency MP Sylvia Lim questioned the view that Singapore's ministers would succeed in the private sector had they not opted for public service instead.

And if Singapore cannot interest good people to enter government, she asked if this was because government leaders had yet to create a culture of high public-spiritedness, despite years of National Education.

Ms Lim made these points during the debate on the civil service and ministerial pay revisions in Parliament on Wednesday.

The NCMP also stressed that in comparing ministerial pay with other countries, the issue was not the level of a country's development, but the skill sets required of an office holder.

To add value to the lives of the people, Ms Lim felt ministers should understand the people's aspirations and lead with both head and heart.

But with ministerial pay pegged at the current benchmarks, she said this has created a disjunct with the income of the average Singapore worker.

It also sends out the message that one's sense of duty to Singapore could be similarly measured in material terms. - CNA /ls

TODAY: Parliament

New Paper: Govt Salary Debate

OVERPAID
HOW THEY DID IT

By Leong Ching
tnp@sph.com.sg

MINISTERS' salaries are pegged to the 48 top earners in the private sector in six professions. These include lawyers, accountants, engineers and local manufacturers.

The method is to rank these top earners according to their pay, take the median pay and take off one-third.

This way, a minister's salary is kept competitive against the private sector.

Defence Minister Teo Chee Hean, who is also Minister-in-charge of the civil service, said that while "there is no perfect method for doing this benchmarking", the current method had been debated thoroughly in 1994 and had the support of the House.

Yesterday, however, opposition Members of Parliament stood up to challenge this benchmarking.

Workers' Party's Mr Low Thia Khiang asked the Government to consider modifying the current benchmarks to "a more equitable and sustainable one".

"We suggest that the benchmark should take into account international practice, in particular countries such as Switzerland, Denmark and Finland," he said, pointing out that these countries have ministers who are paid lower than Singapore.

He noted that these countries have a pay adjustment scheme, but "unlike Singapore, they all do not have a sure-win formula that ensures civil servants always have the best deal by benchmarking specifically to the top few earners".

In the end, he argued, there must be a non-financial element to public service.

"There's simply no point in offering high remuneration just to entice someone to serve if what he is interested in is to make more and more money for himself and his family in pursuit of material interests.

"Don't forget that even if you don't pay peanuts but pay with a bigger piece, say, a banana, you can still get a monkey," he said.

Also arguing against the method of benchmarking was Potong Pasir MP Chiam See Tong.

He said: "I think this is unfair to the taxpayer who is footing the bill, because the high-performance managers, the CEOs are paid all kinds of extras, incentives, perks such as bonuses and stock options, and they also get bonus shares.

"In other words, their salaries are highly inflated. How can our ministers take that as a benchmark?"

A fairer way, he said, is to peg ministers' salaries to those of ministers of other First World countries.

"I think Hong Kong is a good country to follow," Mr Chiam said. "Hong Kong is an Asian country about the size of Singapore. It is paying its head of government about $600,000 a year, or about $50,000 a month. I think this is a fair salary," he said.

People's Action Party MP Inderjit Singh also took issue with the benchmarking approach, even though he supported the pay rise overall.

The Ang Mo Kio GRC MP said he agreed that the ministers and civil servants need to be paid what is due. But instead of a benchmark, he wanted the Prime Minister himself to decide ministers' salaries.

MP for Marine Parade GRC Seah Kian Peng told The New Paper that he thought letting the PM have a say is an idea.

But he said benchmarking is the way to go. Once you have the principle in place, you just have to work out the details.

Mr Seah said: "It is a formula - who are in this group, how do you calculate it. If you want to argue about this, there will be no end to it. Everyone will think that they have a better way.

"If I can offer a suggestion, it is that after all the calculations are done, we still allow the Prime Minister the discretion to make the adjustments within a range, as he deems fit," he said.

TODAY: How well is well-paid?

Parliament

MPs discuss altruism, better salary benchmarks

TAN HUI LENG AND JASMINE YIN
huileng@mediacorp.com.sg



THEY expressed support for the need to pay top dollar for top talent in the public sector. But Members of Parliament (MPs) who took part in yesterday's parliamentary debate on the pay hike also spoke passionately about what many Singaporeans believe to be the heart of the issue: The benchmarking formula used to determine ministerial pay.

Ang Mo Kio MP Inderjit Singh noted that Singaporeans could not expect their leaders to serve based on altruism alone. "Are we willing to leave the future of the country to chance, that we will get good people who will give up their competence without caring about their salary?" he asked.

Some MPs, however, saw problems in benchmarking ministers' pay to the private sector, pointing out to disparities in the risks taken by company chief executives and ministers and top civil servants.

Marine Parade MP Lim Biow Chuan said: "I struggle to understand what a top Admin Officer aged 32 at grade SR9 has to worry about that will justify him receiving $363,000 a year ... From many people's perspectives, they take no personal risk and are at best, paid employees."

Opposition MPs Mr Chiam See Tong (Potong Pasir) and Hougang's Low Thia Khiang took issue with the fact that Singapore's ministers are paid more than their counterparts in developed countries.

MPs like Bishan-Toa Payoh's Mrs Josephine Teo, however, pointed out that ministers in other countries may make more money after their term in office ends, such as through public speaking.

Some MPs voiced concerns about the timing of announcing the pay revisions, especially with the Goods and Services Tax (GST) due to rise to 7 per cent in July.

Mr Singh said: "How do we answer the man-in-the-street when we're told that about one-quarter to one-third of the expected revenue increase this year from the GST is going to be for the proposed ministerial and civil service salary increases, about $240 million, I was told?"

Mr Low also referred to the recent debate on increasing the amounts for public assistance. "It's also ironic that we are consuming taxpayers' money and ... discussing how much more of a fraction of a million to pay civil servants and ministers while we haggle over additional tens of dollars to hand out to our needy and disadvantaged citizens," he said.

Some MPs who supported the pay hike also suggested that the salary benchmarking could be finetuned, such as pegging ministers' salaries to more realistic markers such as top men in private equity firms and top companies based on market capitalisation.

Straits Times: Other nations pay less but still do well: Low and Chiam

PARLIAMENT

BY GOH CHIN LIAN

OTHER countries pay ministers lower salaries without seeming to suffer a drop in the quality of governance, so why not Singapore, asked two opposition MPs yesterday.

Mr Low Thia Khiang (Hougang) noted that Singapore ranked below Finland and Denmark in corruption perception and global competitiveness surveys.

Singapore also ranked 34th in an annual survey on quality of living, while Swiss cities topped the rankings, he said.

At the same time, reports by the United Nations found that civil servants in those countries earned less than those here, he added.

For example, Swiss civil servants' basic salary ranged from 55,000 Swiss francs (S$69,000) to 321,000 Swiss francs.

And while Denmark and Hong Kong also kept their civil service pay in line with the private sector, Mr Low argued that "they do not have a sure-win formula that ensures civil servants always have the best deal by benchmarking specifically to the top few earners".

"We believe there is no need for enormously large salaries to attract and retain the right talent to run a country in an efficient and corrupt-free manner," he said.

The Workers' Party secretary-general said that while the Government could claim to have won the people's mandate at last year's general election and so pay itself as it deemed fit, he was quick to add:

"I do not think Singaporeans have given the Government a blank cheque."

Besides Mr Low, Mr Chiam See Tong (Potong Pasir) also spoke after Defence Minister Teo Chee Hean, who oversees the public service, announced the salary changes.

Mr Chiam said salaries of ministers here surpass those of heads of government elsewhere.

The United States President earns about $1 million, even though the US is 15,000 times larger than Singapore and had over 60 times more people, he said, adding:

"If the heads of government of other bigger and more industrialised countries can live on salaries less than a million dollars, why can't our ministers do the same?"

Why not peg the bonus to key performance indicators of ministries, Mr Low suggested.

The Prime Minister could, for instance, have to achieve a 5-per-cent reduction in the Gini coefficient - a measure of income inequality. Or the Transport Ministry must increase the proportion of trips on public transport during peak hours by 2 per cent.

Mr Low suggested the Government consider setting up a panel for public consultation and come up with a remuneration formula that was reasonable in the eyes of the public.

Mrs Josephine Teo (Bishan-Toa Payoh GRC) offered a different perspective.

Political leaders elsewhere reaped financial benefits after leaving office, she said. Reports say former US president Bill Clinton has received US$40 million (S$60 million) in speaking fees in the six years since he left office.

Mrs Teo also commented on Mr Low's suggestion at an election rally in May last year to peg ministers' pay to what the poorest 20 per cent of Singaporeans earned, and multiply the amount by 100.

She said ministers could not be focused only on the plight of this group of Singaporeans as they had to watch over the well-being of all.

Ms Irene Ng (Tampines GRC) took issue with Mr Low's "rosy view" of Switzerland, Denmark and Finland. She pointed out that Finland has a high unemployment rate. Its prime minister won recent elections by a narrow margin and now had to negotiate a four-party coalition.

"Is this the sort of Singapore he wants, with a high unemployment rate?"

But Mr Low was adamant, asking Ms Ng if the three countries were really that badly off. "They're not Third World countries," he said.

---

MM to Low: Is comparison valid?



HE HAS not spoken in Parliament since 2005, but he felt compelled yesterday to weigh in on the nation's hottest debate.

Minister Mentor Lee Kuan Yew rose to pose a question to opposition MP Low Thia Khiang, who had just claimed that Singapore could pay lower salaries to its civil servants like Finland, Denmark and Switzerland, and still run a country efficiently and without corruption.

MM Lee, the architect of the civil service salary benchmark, asked if Mr Low was "comparing apples with apples".

Did the MP consider Singapore to have a relatively high population compared to its resources?

Had the governments of those three countries brought the standard of living of their people up "multifold times from Third World to First World in one generation", or maintained the quality of government and leadership that sets the tone for the whole civil service and the whole country?

And could a Swiss, Finnish or Danish government bring about the results that Singapore has brought about in their own countries, let alone bringing them and their system into Singapore?

Mr Low replied that these countries were "not anything that is lousier than Singapore" in terms of living standards or government performance.

And while they had different conditions compared to Singapore, Mr Low also noted that the Republic has also been looking to emulate the Swiss standard of living.

This is the rest of their exchange:

MM Lee: The Member has not answered my point. Is he saying we are comparing apples with apples? Is he saying that the system of government in Finland, Denmark and Switzerland can bring (them) from First World to a superpower? Does he realise that...our external trade is 31/2 times that of our GDP, higher than Hong Kong at three times, and that if this economy ever falters, that's the end of Singapore and its First World status?

Denmark, Switzerland and Finland are part of Europe. They can fail and you are still caught in a European situation. If you fail here, you go back to a South-east Asian situation. Just look around you.

Mr Low: Is the MM saying that without paying such a high salary, we are bound to fail? I do not think even if we pay top-earner salaries the present government can bring Singapore up to a superpower.

MM Lee: I am putting a simple question and ask for his clarification. He has compared Singapore as if it were a Denmark, a Switzerland or a Finland. Their system, their governments never produced the kind of transformation that we have, and their system and their government have a broader base. It can afford a mediocre government.

The Singapore base is less than 700 sq km and when we started, it was less than 600. Could the system in Denmark, Switzerland or Finland produce a transformation as in Singapore?

Mr Low: On what basis does MM think that the same system in Denmark and Switzerland put in Singapore will not be able to transform Singapore into what we are today?

I have no claim that it will happen, but I would like to know from the wisdom of MM, why he thinks that it will not.

MM Lee: I would like the Member to explain why he thinks Singapore is comparable to Denmark, Switzerland or Finland.

Look at the size of the country, the location of the country, the resources of the country and the history of the people. Then look at Singapore, its size, its history and the nature of its population.

To make the transformation from what we were in 1959 or 1965, whichever the starting point, to what we are requires an extraordinary government with extraordinary government officers to support it.

If you go back to an ordinary system that exists around us, then you will go down to those levels. It is as simple as that. There is no guarantee that Singapore with less than 700 sq km can maintain this position.

Channel NewsAsia: MM Lee, opposition MP Low Thia Khiang debate increase in salaries

By Asha Popatlal



SINGAPORE : Opposition MP Low Thia Khiang questioned the need for such high salaries for ministers and top civil servants to prevent corruption.

He said Singapore ranked below Finland, Denmark and Switzerland, in a UN report on how corrupt a country is, but these countries pay their top civil servants less than Singapore.

This had Minister Mentor Lee Kuan Yew on his feet and challenging his statements.

"Does he realise that Singapore's GDP is only one-third of its external trade? Our external trade is 3 1/2 times that of our GDP, higher than Hong Kong. And if this economy ever falters, that's the end of Singapore and its First World status. Denmark, Switzerland and Finland are part of Europe. You can fail and you're still caught in the European situation. If you fail here, you go back to a Southeast Asian situation. Just look around you," said MM Lee.

"So is the Minister Mentor saying that without paying such a high salary, we are bound to fail? And even if we pay top earners' salary, can the present government bring Singapore up to superpower (status), as what he has mentioned for those in Denmark?" challenged Mr Low, MP for Hougang.

"I am putting a simple question and asking for his clarification. He has compared Singapore as if it were Denmark, Finland or Switzerland. Their systems and governments never produced the kind of transformation that we have, and their system and government have a broader base and can afford a mediocre government," said the Minister Mentor. - CNA /ls

Straits Times: Opposition MPs, NMP query need for GST hike

They say land sales, with other income, are enough to fund more social spending

BY GOH CHIN LIAN


AGAINST: Ms Sylvia Lim thinks the GST hike is unnecessary as the Government has enough money from other sources for social spending.

TWO opposition MPs and one Nominated MP yesterday questioned the need for an increase in the goods and services tax (GST).

The Government had not put forward a convincing case for it, they said.

Workers' Party chairman and Non-Constituency MP Sylvia Lim and Singapore Democratic Alliance leader Chiam See Tong (Potong Pasir) said the Government had enough money to pay for increased social spending without having to raise the GST from 5 per cent to 7 per cent from July 1.

This is especially so if revenue from the sale of state land and Net Investment Income (NNI) were included.

And the cut in corporate tax from 20 per cent to 18 per cent could well pay for itself without having to raise GST, added Ms Lim.

Mr Chiam noted that land sales raised about $4 billion a year - more than enough to cover any loss of revenue from the lowering of the corporate tax rate and with enough to finance Workfare.

"If the Government is not obsessed with having a Budget surplus on every Budget day, but aims only for a balanced Budget, there is no need for a GST hike," said Mr Chiam.

"It only has to use cash generated by land sales to balance the Budget."

The current practice of excluding revenue from land leases from the Budget is seen as overly conservative and not in line with international accounting standards, noted Ms Lim, citing the International Monetary Fund and the Organisation for Economic Cooperation and Development.

If there was any fear on the Government's part of banking on such volatile revenue, Ms Lim suggested counting, say, just half of it for the Budget.

The MPs also wanted more information on the proposal to include capital gains as part of the NNI from reserves which may be used by a current term of government.

Some economists have said that profits from selling assets or realised capital gains may be included, and estimated that this may boost NNI by some $2 billion to $3 billion.

Nominated MP Eunice Olsen said: "How do we know the income is not enough to preclude the need for a 7 per cent GST or even a 6 per cent GST?"

Also challenged: The argument that GST has to increase to make up for the cut in corporate tax rate.

Ms Lim said analysts have noted that if firms do well, tax collections need not suffer because of a cut in corporate tax.

And in countries like Ireland, a corporate tax cut stimulated growth and attracted foreign capital and talent, she added. If growth is boosted and companies made more, corporate tax revenue may even go up. "The data suggest that the Government may end up better off," she said, a point that her party's secretary-general, opposition MP Low Thia Khiang (Hougang), also raised on Tuesday.

Questioning the need for the GST to go up to raise revenue, she said revenue from personal income tax and statutory board contributions are expected to increase by close to $1 billion in the coming financial year.

And come 2010, the integrated resorts could add more revenue to the taxman's coffers - US$1 billion (S$1.5 billion) to US$2.5 billion a year, according to some estimates.

With these other sources of revenue, there is no need for a GST increase now, she said.

TODAY: Some MPs still questioning GST hike

Concerns over whether Govt can afford Workfare

Loh Chee Kong

EVEN as they lauded the Government's "historic" move to boost the income of low-wage workers through a permanent Workfare scheme, some Members of Parliament were still unconvinced over the need to raise the Goods and Services Tax (GST).

Noting that the Workfare Income Supplement (WIS) scheme would cost the Government some $400 million each year, Opposition MP Low Thia Khiang said it should be able to afford this even if it did not increase GST by 2 percentage points to 7 per cent.

Suggesting that the Government's coffers would be boosted substantially when the integrated resorts are up and running by 2009, Mr Low said: "By citing the rationale to help the needy as a reason to raise the GST, the Government is merely hitching a free ride. Similar handouts to the GST offset package have been given out in the past. The Budget last year, before the elections, is a good example. Even if the Budget was in the red, it didn't need to raise GST nor tap into the reserves."

Ang Mo Kio GRC MP Inderjit Singh called on the Government to dip into the reserves - rather than depend on GST revenue - to fund the country's growth.

Said Mr Singh: "Should we just depend on GST to fund these (expenditures)? If so, I can see GST going up to 15 per cent in the next 10 years. Is it fair then to shift and continue to shift the burden of paying for these investments onto the man in the street who pays the GST?"

In tandem with the increase in GST, the Government had also reduced corporate tax by 2 percentage points to 18 per cent. Such a move, it said, would increase Singapore's competitiveness.

However, some MPs questioned if this would necessarily give Singapore a competitive advantage over Hong Kong, which plans to reduce its already low corporate tax rate.

Nominated MP and lawyer Siew Kum Hong cautioned the Government against engaging in "a race to the bottom", citing the fact that Hong Kong need not worry about its defence expenditure.

Said Mr Siew: "Just as we have long ago decided that our economy cannot compete on the basis of low costs, we also cannot keep competing on the basis of low tax rates. We will need to sell Singapore on our other strengths as well."

Straits Times: Low Thia Khiang praises Workfare, slams GST hike

BY LYNN LEE

OPPOSITION MP Low Thia Khiang (Hougang) did the unexpected in Parliament yesterday. He supported a government policy.

He praised its decision to make Workfare, an income supplement for older low-wage workers, a permanent scheme.

But true to his credentials, he trained his fire on another government move: the hike in the goods and services tax (GST).

Accusing the Government of fleecing the people, he dismissed its reasoning that the hike could pay for more help schemes and make Singapore competitive. There was no need for the hike, he said. The nub of his argument: the Government had enough in its coffers to help the low-wage workers.

He also questioned the timing, as the hike was being effected soon after last year's General Election. 'The first step you have taken is to hurriedly...increase GST and at the same time, raise the banner of helping the poor.

"I'd like to point out whether the Government is fleecing the people," he said in Mandarin.

Mr Low began his speech by giving kudos to Workfare: "This permanent feature to help the lower-income as a part of our safety net scheme has my support. It will help to reduce the income gap with globalisation and help them to meet the cost of living."

Still, he wondered why workers, especially those with irregular incomes, had to contribute to the Medisave account before they could receive any Workfare. "(This) is not so attractive and in some way shows a lack of sincerity of the Government," he said.

Turning his sights then on the GST hike, he said the Government's suggestion that the extra funds raised could be used for help schemes for the needy was a "convenient excuse".

"I believe that for this Workfare income scheme, even without an increase of GST, the Government should be able to afford it," he said.

After all, low-wage workers had always been receiving help, such as the cash handouts and rebates in last year's Progress Package.

Then, there was the GST offset package to cushion its impact. But it would not need to spend on such offsets if it did not raise the GST, he argued. It was also "not clear" how raising GST would give Singapore an economic advantage.

As it was, Singapore's strong economic performance meant more funds could be reaped from corporate tax, he said. And he had read that the GST could be a turn-off for companies, he added.

He also felt that with two casinos due to open here, the Government would get "an endless and constant stream of income".

The People's Action Party (PAP) side was quick to return fire, as the next speaker, Mr Hri Kumar (Bishan-Toa Payoh GRC), chastised Mr Low for asking for fiscal policy to be based on such "speculative future income".

"Mr Low is getting a head start because he is truly gambling with our future," he said.

On Mr Low's point that lower corporate tax alone would not attract businesses here, the PAP MP said that this was not the only strategy involved. Mr Low, he said, had ignored the other measures, such as the investment in infrastructure, and upgrading workers' skills. "These require spending by the Government," said Mr Kumar.

On Mr Low's point that there was no need to raise GST during good times, he dismissed it as "illogical", as it implied that taxes should be raised when the economy was plummeting.

Channel NewsAsia: Low Thia Khiang welcomes Workfare but questions govt's sincerity

By Julia Ng



SINGAPORE : Opposition MP Low Thia Khiang has welcomed the Workfare Income Supplement (WIS) scheme, saying it will be another pillar in Singapore's social safety net.

But he rejected tying it to CPF contributions as this means some odd job workers may be left out of the scheme.

Mr Low, who spoke in Mandarin during Tuesday's debate on the Budget Statement, said this requirement showed a lack of sincerity on the Government's part in helping low-income workers.

He also questioned the need to raise the GST by 2 percentage points and the advantage of cutting corporate tax by just 2 percentage points.

Speaking after Mr Low, MP for Bishan-Toa Payoh GRC Hri Kumar rebutted Mr Low's criticisms, especially on the timing of the GST hike and the amount of corporate tax cut.

Mr Hri said that it was illogical to wait until the economy is not doing well before raising the taxes.

Mr Hri went on to say: "Mr Low said that the corporate tax reduction is not sufficient to attract business. Well, I agree that if that's all we're relying on, then that's not a good thing. But we're not relying solely on the corporate tax reduction. There's a whole slew of measures and which is why we need to invest in our infrastructure, which is why we need to invest in our people and upgrade their skills so that we can attract businesses to come to Singapore."

On Mr Low's criticism against the Medisave-Workfare linkage, MP Halimah Yacob said: "The decision to link WIS to Medisave is a crucial and important one. Unlike Mr Low who thinks it shows the insincerity on the government's part, I think that on the contrary this shows how much concern the government has on the plight of the low income and casual workers."

Recounting the hardships faced by workers without Medisave or CPF, she added: "We spoke to many of them in the cleaning industry, the construction sector, in the other services sector. Their sense of insecurity and fear is real. Why are the casual workers so concerned about falling ill, retiring from work, or if they are the sole breadwinner, if they were to die leaving behind their dependants? The reason is very simple - in Singapore, housing, health and retirement are all tied to the CPF." - CNA/ir