Thursday, 5 January 2012

The First Cut Is The Deepest?

The Singapore Government has clearly been taking note of the 2011 Election results and the voters dissatisfaction with the high level of remuneration that local politicians receive in the Republic.

There is a reason for these salaries which are the highest in the world; they are currently pegged to the salaries of the top 48 from six industry sectors.

The new proposal (and it is just a proposal at this stage, not law) is to extend this benchmark to the top 1,000 across all industries. i.e. the median income of the top 1,000 Singaporean earners.  Mind you, there is also a ' 40-per-cent discount to "signify the sacrifice that comes with the ethos of political service" clause' which rather dissipates the political or real effect of any pay cut.

The President will be hit hardest with a 51% decrease but I am sure will live quite comfortably on the remaining S$1.5 million.

Even with a 36% cut, Prime Minister Lee Hsien Loong will remain one of the highest paid politicians in the world at S$2.2million ($US1.7 million). By comparison, US President Barack Obama earns about $400,000 and the British PM about $US 270,000.

Post-pay cut, the PM's new salary will still be three times that of the Hong Kong chief executive, Donald Tsang, the world's next highest paid political leader, who earns about $550,000.
How the salaries will compare after the pay-cuts
The least a Minister at the lowest entry level grade would expect to get is $S935,000.  According to TodayOnline their salary will now comprise a fixed component of 12 months' pay and a traditional 13th-month Annual Wage Supplement (bonus).

The individual bonus is based on the minister's performance as determined by the Prime Minister while the National Bonus will be linked to "the socio-economic progress of average and lower income Singapore citizens".

Source - Report on Salaries for a capable and committed Government (TodayOnline)
While the international press is is offering scant praise ito news of the pay cuts, it needs to be remembered that the rational behind the high salaries in the first place was to entice the best professional candidates into politics.

This might be a fine idea in times of economic bliss but when recession bites, as it has in Singapore these past two quarters, the voters find such largesse difficult to stomach. This in combination with MRT problems, housing price rises and taxi woes points to challenging times ahead.  The income of Singaporeans in the bottom fifth has been flat or negative in the 10 years to June 2010 while politicians salaries have soared since the 1990's.

But I wonder if all the above truly reflects the cost of a politician?  Making judgments on salary alone is insufficient.  A 'total cost of office' should include salary, entertainment, total travel, pensions and personal security costs, to name but a few.

If such an equation was in place then the true comparison between US President's cost and those of the Singapore PM would be dramatically different.  Having seen the US President's advance security sweep in action before a planned visit, I can vouch that these are thorough and the costs considerable.

Bottom line which only the voters can answer -  are you getting value for your money?
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1 comment:

Anonymous said...

As to are we getting value for our money for the current bunch of MIW - the answer is NO. The fact the US president incurs heavy cost in security and other stuff shows he has heavy responsibility and important. Our PM is no where near US president status and he is high over pay and there is no justification for it.