31 March 2007

A Case for Ministerial Salary Increase

The blogosphere has been blaring their discontent and frustration at the recent ministerial pay hike. And of course, any attempts to support the government's action, like this one on the Young PAP Blog, is like an ant being flushed down a toilet bowl. But these anti-pay hike bloggers could just be flogging a dead horse, couldn't they?

But I have been asking myself, is this pay hike justified, if we assume the Singapore Inc. line of thinking? This thinking goes along the idea that Singapore is run like a company, where its citizens are economic units. They are valuable as long as they can provide economic benefit to the country. Of course, with this comes a lack of true loyalty and belonging to the country. Not many will hesitate given a chance to leave Singapore and never come back. Not many will serve NS because "I must" but because "I have no choice". Not many will think of sacrificing for their homeland. Not many will feel deep attachment to this nation.

Now, like some impending storm approaching me, I see this dire situation as more and more of a reality, and if I assume so, then I ask myself if the pay hike is justified. For if people are not willing to sacrifice to be ministers, it is imperative for the government to attract talent with whatever means possible. Yes, there may be people who are willing to do it for low pay, but being a minister requires so much more than talent. It requires the excellent people, and if the country cannot get them to sacrifice themselves for it, then it has to hire them. A "why do they need so much money" kind of argument simply doesn't hold because the money is simply to "buy" them from the private sector.

So to me, it is logical to increase ministerial salaries so as to close the gap between their pays and their equivalents in the private sector, if we operate under the assumption that Singapore is being run like a company. Of course, a country should not be run like a company in the first place, and because I take this stand, therefore I disagree with the increase. But still, my opinions should not disrupt the logic of Singapore Inc. -> ministerial pay hike.


Mr Wang Says So said...

The problem here is legitimacy. Who determines what salaries the ministers should be paid? The ministers themselves.

The comparison with the private sector therefore falls flat, because listed companies have to be accountable to their shareholders. Directors' salaries are disclosed, and unhappy shareholders have the opportunity to kick out overpaid directors.

Whereas, seriously, there is no such mechanism to check the PAP ministers today. To give you an extreme example, suppose they raise their own salaries arbitrarily to $10 million a year. There is seriously nothing that citizens can do, at least for the next five years. In the meantime, each minister will walk away with $10m x 5 = $50,000,000.

Pandemonium said...

I concede that the comparison is not perfectly fitting, but I think there are still some similarities. Perhaps I've misunderstood how a listed company works, but I believe there is still some "lag time" before the shareholders can kick them out (such as a year, in the company's AGM). In a country, however, the "lag time" is much longer, and in Singapore, five to six years. Still, if a director wants to raise his salary sky high and get kicked out in the next AGM, I doubt there's anything much the shareholders can do (unless it is over extreme). You're the expert here, so if there's some mistake in my understanding, do let me know.

Nonetheless, from another point of view, the comparison still holds. Suppose, because of the Singapore Inc. mentality of the population we have very few people who are willing to sacrifice themselves. In such a situation, the government will have to pay high salaries to attract the capable people, just as a company will pay high salaries to get top directors. Furthermore, if the government cannot get capable people when offering lower salaries, it has then no choice but to offer high salaries in hope of getting them.