PMO calls for ‘significant discount’ in ministers’ pay relative to private sector
By JAMIE LEE 23 May 2011
The government has sent its strongest signal yet that a pay cut for the President and the ministers is on the cards: Yesterday, it spelled out the limitations of presidential duties and the need for a ‘significant discount’ in ministers’ pay compared to private sector salaries.
These and other guidelines for the new salary review committee - the other members of which were named yesterday - also call for a relook at the pay structure for Members of Parliament and political appointment holders, according to a media release.
The seven new individuals identified to join National Kidney Foundation chairman Gerard Ee in the committee represent unions, the private and public sectors and charity organisations. They include Stephen Lee, president of Singapore National Employers Federation and chairman of Singapore Airlines; Fang Ai Lian, chairman of the Charity Council and insurer Great Eastern; Venture Corporation CEO Wong Ngit Liong and BreadTalk Group chairman George Quek.
The Prime Minister’s Office said in its media release that the committee must review the basis and level of salaries ‘for the President, Prime Minister, political appointment holders and Members of Parliament to help ensure honest and competent government’. It must also take into account salaries of comparable jobs in the private sector and other reference points such as general wage levels in Singapore.
‘While the salary of the President should reflect the President’s high status as the head of state and his critical custodial role as holder of the second key, it should also take into account the fact that unlike the Prime Minister he does not have direct executive responsibilities except as they relate to his custodial role,’ the release said. ‘The salary of ministers should have a significant discount to comparable private sector salaries to signify the value and ethos of political service.’
The committee will also use ministers’ job specifications as a reference, Mr. Ee told Channel NewsAsia. No deadline has been set for the recommendation report, but the new salaries will be backdated to May 21, 2011 - the date the new government took office.
Prime Minister Lee Hsien Loong’s salary of about $3 million is much higher than that of his Asia-Pacific and global counterparts. A February report by CNN showed that Donald Tsang, Chief Executive of Hong Kong, earns some US$530,000 (about $656,000) a year, Australia’s Prime Minister Julia Gillard takes home about US$345,000 annually, and South Korean President Lee Myung Bak - who has already built about US$31 million in personal wealth as the ex-CEO of Hyundai - earns US$137,000 a year, all of which is pledged to the less fortunate.
Ministers here are paid some two-thirds of the median income of the top eight earners in six professions such as bankers and lawyers - a benchmark that some market watchers think should be changed to a peg on median income.
The Singapore Democratic Party had proposed that the PM’s pay be 30 times the median income here. The monthly median income of Singaporean residents in full-time employment was $2,710 in June 2010, which means the PM would earn about $976,000 a year on that basis, or about 30 per cent of his current pay.
The UK’s senior salaries review body - a nine-person panel that has provided independent advice on salary reviews since 1971 - looks at broad factors that include the government’s inflation target, the differences between employment terms of the public and private sectors, the state of the labour market and economy, and staff retention. The review body is made up of economists, businessmen and human relation consultants. Ministerial pay in the UK - which chose to implement drastic austerity measures in the light of its £167 billion (S$336 billion) budget deficit last year - has been slashed in recent months.
British Prime Minister David Cameron has seen his annual pay go down twice in just over a year. His predecessor Gordon Brown ordered last year that the prime minister’s remuneration package be cut from £194,000 to £150,000. Soon after, Mr. Cameron’s personal initiative to take down ministerial salaries by 5 per cent across-the-board left him with £142,500, equivalent to about $285,000.
These salaries exclude certain subsidies, however. For example, Ministers in the House of Lords who have a second home in London get a night subsistence allowance of £33,990 per annum (about $68,000).
Over in the United States, the annual salary of its president was raised to US$400,000 annually in 2001, or doubled from US$200,000. But President Barack Obama’s 2010 tax return showed that he earned US$5.5 million, mostly from book sales.
Many former US presidents earn well after they leave the White House. In 2007, The Washington Post cited that Bill Clinton earned nearly US$40 million in speaking fees over six years.
PM Lee said last month that the high fees earned by US politicians through such speaking engagements and book sales did not make a good system, adding then that having the president’s pay set so low would mean a low pay ceiling for the rest of the civil service.
The Singapore government does not reveal how much each minister is paid, although it showed that in 2009, an entry-grade minister was paid $1.57 million. Ministerial salaries also have not strictly followed the benchmark, as ministers have taken pay cuts during downturns.
Ministerial salaries last year stood at about 70 per cent of the benchmark, with increments postponed in the light of the financial crisis of 2009.
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Big pay cuts on the cards
PMO calls for ‘significant discount’ in ministers’ pay relative to private sector
By JAMIE LEE
23 May 2011
The government has sent its strongest signal yet that a pay cut for the President and the ministers is on the cards: Yesterday, it spelled out the limitations of presidential duties and the need for a ‘significant discount’ in ministers’ pay compared to private sector salaries.
These and other guidelines for the new salary review committee - the other members of which were named yesterday - also call for a relook at the pay structure for Members of Parliament and political appointment holders, according to a media release.
The seven new individuals identified to join National Kidney Foundation chairman Gerard Ee in the committee represent unions, the private and public sectors and charity organisations. They include Stephen Lee, president of Singapore National Employers Federation and chairman of Singapore Airlines; Fang Ai Lian, chairman of the Charity Council and insurer Great Eastern; Venture Corporation CEO Wong Ngit Liong and BreadTalk Group chairman George Quek.
The Prime Minister’s Office said in its media release that the committee must review the basis and level of salaries ‘for the President, Prime Minister, political appointment holders and Members of Parliament to help ensure honest and competent government’. It must also take into account salaries of comparable jobs in the private sector and other reference points such as general wage levels in Singapore.
‘While the salary of the President should reflect the President’s high status as the head of state and his critical custodial role as holder of the second key, it should also take into account the fact that unlike the Prime Minister he does not have direct executive responsibilities except as they relate to his custodial role,’ the release said. ‘The salary of ministers should have a significant discount to comparable private sector salaries to signify the value and ethos of political service.’
The committee will also use ministers’ job specifications as a reference, Mr. Ee told Channel NewsAsia. No deadline has been set for the recommendation report, but the new salaries will be backdated to May 21, 2011 - the date the new government took office.
Prime Minister Lee Hsien Loong’s salary of about $3 million is much higher than that of his Asia-Pacific and global counterparts. A February report by CNN showed that Donald Tsang, Chief Executive of Hong Kong, earns some US$530,000 (about $656,000) a year, Australia’s Prime Minister Julia Gillard takes home about US$345,000 annually, and South Korean President Lee Myung Bak - who has already built about US$31 million in personal wealth as the ex-CEO of Hyundai - earns US$137,000 a year, all of which is pledged to the less fortunate.
Ministers here are paid some two-thirds of the median income of the top eight earners in six professions such as bankers and lawyers - a benchmark that some market watchers think should be changed to a peg on median income.
The Singapore Democratic Party had proposed that the PM’s pay be 30 times the median income here. The monthly median income of Singaporean residents in full-time employment was $2,710 in June 2010, which means the PM would earn about $976,000 a year on that basis, or about 30 per cent of his current pay.
The UK’s senior salaries review body - a nine-person panel that has provided independent advice on salary reviews since 1971 - looks at broad factors that include the government’s inflation target, the differences between employment terms of the public and private sectors, the state of the labour market and economy, and staff retention. The review body is made up of economists, businessmen and human relation consultants. Ministerial pay in the UK - which chose to implement drastic austerity measures in the light of its £167 billion (S$336 billion) budget deficit last year - has been slashed in recent months.
British Prime Minister David Cameron has seen his annual pay go down twice in just over a year. His predecessor Gordon Brown ordered last year that the prime minister’s remuneration package be cut from £194,000 to £150,000. Soon after, Mr. Cameron’s personal initiative to take down ministerial salaries by 5 per cent across-the-board left him with £142,500, equivalent to about $285,000.
These salaries exclude certain subsidies, however. For example, Ministers in the House of Lords who have a second home in London get a night subsistence allowance of £33,990 per annum (about $68,000).
Over in the United States, the annual salary of its president was raised to US$400,000 annually in 2001, or doubled from US$200,000. But President Barack Obama’s 2010 tax return showed that he earned US$5.5 million, mostly from book sales.
Many former US presidents earn well after they leave the White House. In 2007, The Washington Post cited that Bill Clinton earned nearly US$40 million in speaking fees over six years.
PM Lee said last month that the high fees earned by US politicians through such speaking engagements and book sales did not make a good system, adding then that having the president’s pay set so low would mean a low pay ceiling for the rest of the civil service.
The Singapore government does not reveal how much each minister is paid, although it showed that in 2009, an entry-grade minister was paid $1.57 million. Ministerial salaries also have not strictly followed the benchmark, as ministers have taken pay cuts during downturns.
Ministerial salaries last year stood at about 70 per cent of the benchmark, with increments postponed in the light of the financial crisis of 2009.
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