Ministers and civil servants get pay rise of up to 33%

SALARIES of civil servants and ministers are going up this month, with ministers at the starting grade getting the biggest pay rise of 33 per cent.

The size of the increments will depend on how far behind salaries are compared to their private sector benchmarks and on individual performance, Mr Teo Chee Hean, the minister in charge of the civil service, told Parliament yesterday.

Pay will be more closely tied to performance. Thus, the variable portion in ministers' pay will go up from the current one-third to almost half.

The pay packet of ministers at the entry grade of MR4 is now $1.2 million, or 55 per cent of the private sector benchmarks to which it is pegged.

It goes up to $1.6 million this year, which takes it to 73 per cent of the benchmark. A second round of increases is planned for next year to bring it to 88 per cent of the benchmark.

More senior ministers will get smaller increases, sliding from 33 per cent to 14 per cent at the higher grades.

With the change, the Prime Minister's annual salary will go up from $2.5 million to $3.1 million.

This will place him at No. 102 in the ranking of top income earners among Singaporeans, permanent residents and Malaysians working here, up from 164 currently.

But it will still be lower than in 2000, when his salary ranked 63rd.

The total salary revisions for the civil service will increase the Government's wage bill by $214 million or 4.7 per cent. The wage bill for political appointment holders goes up by $10.5 million or 23 per cent to $56 million.

The bulk of the civil service wage increases will go to teachers, police and other uniformed officers, management executives and others who make up the 64,000-strong civil service.

In setting forth the changes for Parliament to consider and debate, Mr Teo said the policy of competitive wages had enabled the Government to induct and retain able men and women.

As a result, Singapore could maintain its 'competitive advantage' of a clean, effective and efficient public service.

It was what Harvard Business School professor Richard Vietor described in a new book as 'the best example of government that works', he said.

Mr Teo added: 'We don't want pay to be the reason for people to join us. But we also don't want pay to be the reason for them not to join us, or to leave after joining us.'

The salary revisions will not be in quantum alone.

Mr Teo also announced a major restructuring of pay for ministers and top civil servants at grade MR4 and above, which will increase the variable portion of their annual package from 34 per cent now to 47 per cent.

With the change, a fifth of ministers' annual salaries will depend on a GDP bonus of between zero months, if the economy grows by 2 per cent or less, and eight months, if it expands by 10 per cent or more.

Another quarter of their salaries will be linked to performance. The Prime Minister will decide how much performance bonus each minister receives.

A fixed car allowance of 2.5 months will be scrapped.

The annual allowance of Members of Parliament, last revised seven years ago, will also go up by 23 per cent to $216,300.

Among civil servants, officers in the Home Affairs Uniformed Services, graduates in the management executive scheme and Foreign Service officers are set to receive the biggest pay increases.

Yesterday, 11 MPs joined in the debate.

Most supported the principle of competitive salaries but several questioned the benchmarking formula and the timing of the increase.

Two MPs suggested having an independent panel decide the benchmarks, with West Coast GRC MP Ho Geok Choo arguing that the present process could be construed as 'self-serving'.

The temperature in the House rose a few degrees when Minister Mentor Lee Kuan Yew, who last spoke in the House in 2005, rose to challenge Workers' Party MP Low Thia Khiang.

Mr Low said that Finland, Denmark and Switzerland ranked higher than Singapore in certain studies on clean government and the standard of living, yet their leaders earned much less than those here.

Mr Lee replied: 'Their governments never produced the kind of transformation that we have. To make the transformation from what we were in 1959 or 1965, to what we are requires an extraordinary government with extraordinary government officers to support it.'

The debate continues today.