DPM Teo's full speech on political salaries

Speech by Deputy Prime Minister, Coordinating Minister for National Security and Minister for Home Affairs Mr Teo Chee Hean at the Parliamentary debate on political salaries on January 16, 2012.

Mr Speaker, Sir, I beg to move:

That this House endorses Paper Cmd. 1 of 2012 on "Salaries for A Capable and Committed Government" as the basis for setting salaries of the President, Prime Minister, Speaker and Deputy Speakers of Parliament, political appointment holders, and Members of Parliament.

On 21 May last year, Prime Minister Lee Hsien Loong formed a committee chaired by Mr Gerard Ee to review political salaries. Prime Minister Lee recognized that Singaporeans had genuine concerns over the present salaries of their leaders. At the same time, Ministers should be paid properly so that Singapore will have capable and committed leadership over the long term.

The issue of salaries for political appointment holders has been debated in this House many times, for example in 1981, 1989 and 1993. In 1994, there was an extensive debate on the White Paper on Competitive Salaries for Competent and Honest Government which established the previous framework for Ministerial salaries. Since then, Parliament has had two more debates about political salaries - in 2000 and most recently in 2007 - when modifications were made to the framework to improve it, and to respond to new economic and social developments.

These have not been easy debates, as salaries tend to be complex and emotive issues, and especially so when they are for those holding elected office. But the government has not shied away from having them because we believe that having the right people to lead Singapore will have a fundamental impact on the future of Singapore. And having the right salaries is a critical component in having the right people. Given that the level of political salaries is of importance and interest to all Singaporeans, we should be open and transparent in discussing it.

I would like to thank the Committee for taking on this challenging task. The Committee comprised a group of eight independent members with deep experience, and prominent in a range of sectors - social and community service, business, trade unions and professional services. The Committee sought feedback widely. They received and considered more than 500 e-mails and letters from the public and Members of Parliament. They tapped on a human resource consultancy firm, Mercer, for its technical expertise in job evaluation, pay benchmarking and design. All Members of this House had the opportunity to send in their views and suggestions to the Committee, and I hope that Members availed themselves of this opportunity. Several Members were interviewed by Mercer. After thorough deliberation and consideration of the various proposals during 10 meetings over half a year, the Committee submitted its recommendations to the Prime Minister on 30 December 2011.

The key recommendations of the Committee are:

• One, a new benchmark, which is based on the median income of the top 1,000 earners who are Singapore citizens, with a 40% discount to reflect the ethos of political service;

• Two, a new salary framework and National Bonus linked to the socioeconomic progress of average and lower income Singaporeans; and

• Three, removal of the pension scheme for politicians

The key outcomes of the new framework are:

• The President's total annual salary is reduced by 51%, and the Prime Minister's total annual salary by 36%; the President's annual pay will now be 70% that of the Prime Minister;

• The entry-level Minister's total annual salary is reduced by 37%; and

• For a Minister's total annual salary to start from $935,000.

I understand that what the Report has referred to as total annual salaries is commonly described as "total annual compensation" or "total annual remuneration" in the private sector. So when we say total annual salaries, we are really talking of the same thing.

The Government has considered the Committee's report carefully, and is satisfied that the Committee has studied this subject of political salaries very thoroughly. They have established a set of key principles. They have explained the reasons for their recommendations clearly and cogently. They have exercised their collective judgement in determining how to balance the ethos of public service with an appropriate salary that will not deter able persons from taking up political office.

The Government therefore intends to accept the Committee's recommendations. They are fair and balanced, and are an improvement to the previous salary framework. We have thus adopted the report as a White Paper and I am moving a Motion to seek Parliament's endorsement for it to be used as the basis for setting political salaries.

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