Monday, January 16, 2012

Workers' Party's proposal on Ministerial salaries is the clearest yet

See my blog entries on Ministerial salaries HEREHERE and HERE.

The points I was trying to make with these blog posts are that:

1. The fundamental for pegging the salaries of the Ministerial to the private sector is flawed.

2. The salaries of political office holders should be pegged to the salaries of Members of Parliament.

3. The Ministerial salaries must be uncluttered with unnecessary components like 'National Bonus'.

What I did with the second blog entry was to try and peg the MP's salary appropriately (to that of the employed households), so that the other political office holders salaries could be appropriately pegged to this figure.

But now after hearing all sides of the argument (SDP, NSP, PAP, WP and various voices from the blogosphere), I agree that we need not have complicated formulas for pegging the MP's salary.  I agree with the Workers' Party's proposal that the Ministers salaries should be pegged to multiples of the MP's salary; and that the MP's salary pegged to the starting salary of entry-grade senior civil servants in the regular civil service.

The Workers' Party's proposal on Ministerial salaries suggests:

The starting salary of entry-grade senior civil servants in the regular civil service — a director of MX9 grade in the Management Executive Scheme of the civil service (outside of the Administrative Service) is approximately $11,000 a month. 
In our proposal, MP allowance would be about $11,000 per month, Ministerial salary would range from $55,000 per month for entry-grade ministers to $99,000 per month for the Prime Minister.

WP's proposal would mean that an entry-level Minister would draw an annual salary of $715,000 ($55,000 X 13 months), while the Prime Minister will draw $1,278,000.

This would be quite close to the numbers I specified in the blog entry suggesting that an entry-level Minister be paid $724,750 and the Prime Minister $1,207,908.

1 month annual variable component and 2 months' performance bonuses (tied to Real Median Income Growth Rate, Real Growth Rate of the Lowest 20th Percentile Income, Unemployment Rate and Real GDP Growth Rate) could also be paid in addition to these salaries (this would mean that an entry-level Minister's salary would be in the range of $715,000 - $880,000; and the Prime Ministers salary would range from $1,207,908 - $1,584,000).

This would be a cleaner wage than that suggested by the Ministerial Salary Review Committee as it would not be cluttered with so many unnecessary components like 'National Bonus'.

More than the amount, the peg suggested by the Workers' Party will ensure that the fundamentals of Ministerial salaries remain right, with the emphasis being on public service.

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5 comments:

Admin said...

While I agree the "benchmark" should be simple, but I believe it should be broad base as well.

Pegging the root salary to the civil servant's pay will create a situation where conflicts of interests will be involved. i.e. ruling party could just increase civil servants' pay and in effect, increase their own pay as well, in multiple folds. This is not an objective peg.

Admin said...

While I agree the "benchmark" should be simple, but I believe it should be broad base as well.

Pegging the root salary to the civil servant's pay will create a situation where conflicts of interests will be involved. i.e. ruling party could just increase civil servants' pay and in effect, increase their own pay as well, in multiple folds. This is not an objective peg.

Steven Foo said...

The civil service is the largest employer and if their pay is increase, the private sector would also be sucked into the wage spiral.... end result is all workers' salary (public or private) would rise in tandem with the politicians' manipulation to satisfy their greed. And in so doing make Singapore uncompetitive so be it...at least every citizen had a bite of the pie as we sink together with such folly.

Gary said...

Not likely scenario for the govt to simply up the salaries of civil servants in order to benefit themselves. Civil service salaries are kept at a competitive rate with the private sector's. The mechanism cannot be so easily manipulated.

sgcynic said...

The safeguards in the Workersr' Party's proposal would be a good check against "conflict of interest", definitely much better than the current process - the "proposal" is done up by an 'independent' commission who proceed to submit the it to the PM who accepts it and then shows it to his own party BEFORE Parliament. The House then 'debate' 'passionately' and the PAP MPs ultimately endorses the proposal wholesale under the crack of the party whip.

http://yawshinleong.blogspot.com/2012/01/shin-leongs-speech-on-ministerial.html

The convoluted structure of the ministerial pay, with the many layers of bonuses, incidentallly mirrors the complex structure of our 'world class' taxi fares, with it's myriad quantum surcharges, that grew and flourish under the regulatory regime of the PAP government's free market system.