OPINION: On the Distorted Logic of Ministerial Salaries in Singapore 

OPINION: On the Distorted Logic of Ministerial Salaries in Singapore 
Photo Credit: Reuters / TPG
What you need to know

Singapore's prime minister arguably has less to deal with than his fellow national and municipal leaders, so why is he paid such astounding sums?

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After living in a bigger country (both in terms of land mass and population), it is very difficult for me to wrap my head around the logic of Singapore's ruling party, the People’s Action Party (PAP); that its prime minister and ministers should be paid such high salaries (not that it was easy before).

In Taiwan, President Tsai Ing-wen (蔡英文) governs over a country with metropolitan areas like Greater Taipei, which houses 7 million people, as well as major cities like Kaohsiung and Taichung with about 2.7 million people each, and Tainan with 1.9 million people, or a total population of 24 million people for the whole of Taiwan.

Moreover, Taiwan's gross domestic product (GDP) is US$612 billion, or the 13th largest in the world.

Singapore's population is 5.8 million, and its GDP was US$310 billion in 2016.

The Greater Taipei Area, which comprises Taipei, New Taipei and Keelung, has a population larger than the city of Singapore (which is essentially the country), and there are three cities in Taiwan each with about half the population of Singapore.

蔡英文出訪史瓦濟蘭
Photo Credit:蔡英文臉書
Taiwan President Tsai Ing-wen earns a fraction of her Singapore counterpart.

Taiwan's total population is four times that of Singapore while Taiwan's GDP is about twice that of Singapore's.

President Tsai governs over a much larger population and economy but only earns about US$218,000 a year, while the Singapore prime minister, Lee Hsien-loong, earns a base salary of S$2.2 million (US$1.6 million) a year.

In other words, Singapore's GDP is only half that of Taiwan, but the Singapore prime minister earns more than seven times that of the Taiwan's president.

International comparisons

Or look at Germany, which has cities like Berlin with 3.5 million people, Hamburg with 1.9 million people, Munich with 1.5 million people and Cologne with 1 million people, or a total of population of 82.3 million people. Germany's GDP in 2017 was US$3,686 billion, or the fourth-largest in the world.

There are 14 cities in Germany each with more than 500,000 people, and Germany's total population is 14 times that of Singapore, while Germany's GDP is 13 times larger.

The German chancellor, Angela Merkel, governs over a much larger population and economy but only earns about US$370,000 a year.

In other words, Singapore's GDP is less than one-tenth that of Germany, but the Singapore prime minister earns more than four times that of the German chancellor.

Or in terms of real GDP growth, according to the International Monetary Fund’s April 2018 World Economic Outlook, Singapore’s economy is projected to grow at 2.9 percent on year.

New Zealand is earmarked to grow at 2.9 percent and Australia at 3 percent. New Zealand Prime Minister Jacinda Arden's base pay is US$340,000 a year while Australian Prime Minister Malcolm Turnbull takes home US$528,000 a year.

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Photo Credit: AP/達志影像
Australian Prime Minister Malcolm Turnbull (C) is doing nicely for himself.

If the Singapore prime minister cannot galvanize Singapore to grow at three to five times the rate of the Australian and New Zealand prime ministers, why is he earning three to five times what they earn?

In Luxembourg, the IMF projects real GDP growth at 4.3 percent, or 1.5 times higher than Singapore's. The Luxembourg prime minister, Xavier Bettel, earns US$278,000 a year.

The Luxembourg prime minister is presiding over a country forecast to grow 1.5 times faster than Singapore, yet Singapore's prime minister pays himself nearly six times the salary.

City slicking

These discrepancies are not just evident on a national level. Singapore can be compared with cities of similar stature, such as those in the Global Power City Index 2017, which evaluates and ranks the world's major cities in relation to their ability to attract businesses and individuals.

London ranks top. According to the Office for National Statistics, Greater London has a population of 8.8 million and its GDP is over US$700 billion, which is more than twice that of Singapore's.

In second place, New York City is home to 8.6 million people, according to the U.S. Census Bureau, and the GDP there is more than US$1.5 trillion, which is 4.5 times that of Singapore's.

And in third place, Tokyo, with a metropolitan area that houses 13.5 million people, and a GDP of US$1.1 trillion, which is more than three times that of Singapore's.

Singapore is fifth in the ranking.

Britain's newly elected mayor Sadiq Khan arrives for his first day at work at City Hall in London
Photo Credit: Reuters / TPG
Mayor of London Sadiq Khan.

In London, the mayor who runs the city, Sadiq Khan, earns about US$259,000 a year. The Mayor of London runs a city with an economy more than twice that of Singapore but only earns less than one-fifth (16% percent) of the salary of the Singapore's prime minister.

In New York City, the mayor earns US$259,000 a year. The New York City mayor, Bill de Blasio, runs a city with an economy 4.5 times larger than that of Singapore but only earns 14 percent of Lee Hsien-loong’s wages.

And in Tokyo, the governor who runs the city, Yuriko Koike, earns about US$158,000 a year. The Tokyo governor runs a city with an economy more than three times that of Singapore but only earns one-tenth that of the Singapore prime minister.

These three cities have two to five times the GDP of Singapore, yet the Singapore prime minister earns more than six to 12 times that of the London mayor, the New York City mayor and the Tokyo governor.

Summing up

In short, in light of his purview, there is no reason why the Singapore prime minister should earn S$2.2 million (these number do not include bonuses).

Comparing Singapore's economy with the other countries and cities, the Singapore prime minister should earn only about one-tenth of his current salary, or S$220,000 (US$160,000) a year.

It is ridiculous to claim, as the PAP has in the past, that high ministerial salaries can prevent corruption. If this logic holds true, then all Singaporeans should earn the highest salaries in the world to prevent any form of corruption in Singapore.

If Singaporeans are not paid the highest salaries, then by the PAP's logic, Singapore should be riddled with corruption.

The S$1,100 per month that some security guards and cleaners are earning in Singapore is the lowest wage among advanced countries with a similar level of per capita wealth, but Singapore's level of corruption, and by extension given the nature of security guards' jobs, property-related crime, has not gone through the roof, has it?

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Photo Credit: Reuters / TPG
Cleaners in Singapore are paid so little they are guaranteed to be incorruptible.

Or are we saying that these other advanced countries that pay their heads of government much lower salaries are corrupt through and through? But that is not the case either, is it?

And if these countries are able to maintain a low level of corruption without paying their ministers such inflated salaries, what does that say about Singapore's ministers – that they need high salaries to prevent them from being corrupt?

If their salaries were truly pegged to performance, the PAP would have to be responsible for Singapore's economy growing more than 10 times as fast or its workers earning 10 times as much as all the other countries in order to be commensurate.

For the record, here is the current framework for determining ministerial salaries:

"(a) Salaries must be competitive so that people of the right caliber are not deterred from stepping forward to lead the country; (b) The ethos of political service entails making sacrifices and hence there should be a discount in the pay formula; and (c) There should be a “clean wage” with no hidden benefits. The salaries should also be linked to the individual performance of political appointment holders, and the socio-economic progress of Singapore Citizens."

Is Singapore’s socio-economic progress 10 times that of its peers?

No, the PAP has only helped themselves with the country's money to pay themselves high salaries, while leaving unaddressed Singapore's gaping income gap.

If the PAP insists that high salaries should simply be paid to them to prevent corruption, even as the economy performs similarly to other countries, then we are in effect giving out free money; and if free money should be handed out like this, then free money should be thrown at all Singaporeans, notwithstanding inflationary concerns.

Why then is Singapore government spending on social protections among the lowest in developed countries, and if taken as a percentage of GDP is less than half of that spent in South Korea and five times less than that allocated in Japan?

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Photo Credit: Reuters / TPG
A Singapore Management University study puts the level of relative poverty in Singapore at 20 to 30 percent.

Why is the government intent on lining its own pockets rather than putting that money to work for the as many as 35 percent of Singaporeans living in relative poverty?

In short, the whole twist of logic and propaganda that the Singapore government uses to feed their own addiction to high salaries can only be called one thing - bullshit, as Malaysia's new prime minister Mahathir would say.

If preventing corruption means paying high salaries while preventing low-income Singaporeans from earning more to allow them to live decently, while withholding the people's money from their health and pension funds, while helping companies to earn high profits at the expense of workers, and paying the heads of these government-linked companies high salaries even as they are not experienced and qualified for their jobs causing these companies to fail, while the government siphons off the people's health and pension funds into the government investment agencies, and with this kept hidden for decades only to be revealed in 2014, while still not returning the monies to the people in a transparent manner, then I suppose Singapore has succeeded.

And if there is a need to persecute Singaporeans who speak out on these issues, and deliberate new laws to do so, all under the banner of preventing corruption in Singapore, and if using these laws against Singaporeans to prevent them from exposing falsehoods can prevent corruption, then I think Singapore is truly an idyllic place to be.

Read Next: Cambridge Analytica – The Singapore Connections

Editor: David Green

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