Excessive Ministerial pay is not there to secure talent. If the government were interested in talent it would want to promote competition and encourage a market place of ideas.

This is what I said when interviewed by Today in 2010, http://sonofadud.com/about-ricebowl/about/interview-for-today-newspaper-in-2010-which-explains-a-little-bit-about-me/

“The PAP may be against the two-party system but it’s inevitable, as we have seen in Korea, Taiwan and Indonesia. The problem with the one-party system is not corruption – at least not in Singapore because the Government is not corrupt – but it leads to a society closed to new ideas, with too many “yes men”.

Nothing much has changed since that interview except maybe that women are proving to be the best “Yes Men” amongst the Ministerial ranks and we are realising that the key word in discussion of Ministerial pay is not “corrupt” but “obscene”.  The PAP still takes steps to ensure that only the official point of view is heard. Betraying its Communist roots, the PAP is organised as an old-fashioned monopolist where high pay levels reflect the lack of competition.  Like the cadre system or the nomenklatura system for the Stalinist and Brezhnev-era elite, the payment of economic rent is there to ensure loyalty and a cabinet of yes-men.

Yesterday the PM gave his rationale for our excessive Ministerial salaries. He asked several important questions,

• Can a future PM continue to get the best and most committed people to serve as his ministers?
• In fact, can we get the best possible future PM for Singapore?
• How can our pay system support this important goal?

So far so good but of course for our dear PM these were just rhetorical questions.  In fact he failed to answer them and instead side-stepped and answered some easier questions. That’s disappointing. For me one of the most interesting aspects of the Pay review commission has been the questions asked.GerardEestarted his presentation with the question,

• What is Singapore?

Gerard answered his question by saying that Singapore is a rock and then used that as justification for the pay levels but the question is one that requires further discussion.  Many Singaporeans would say that Singapore is a Nation of convenience for whoever wants to take advantage of our tax haven and secret banking facilities. A Nation built on a rock by the sweat of our brow for the convenience of others, who now reap our just rewards.

The Prime Minister answers his own  rhetorical questions by going on to say that it was only by paying people well (obscenely well by the standards of what ordinary Singaporeans earn and by the pay of politicians in other countries with similar or higher living standards) that Singapore could get these people to come forward.  There may be public-spirited people among us, PM Lee asked, “But will there be enough of them to produce a whole team of ministers, a whole Cabinet equal to the task and with the standards which we have come to expect?”  (ST, 18^th January).

The problem is not the pay structure as a barrier or an enticement. Part of the obstacle to developing talent as I have said elsewhere is the cadre system.

I have also already written elsewhere (http://sonofadud.com/2012/01/05/a-committee-that-cannot-calculate-the-median-of-the-top-1000-is-either-deliberately-misleading-the-public-or-incompetent/) about how absurd it is to benchmark the pay of politicians against the median income (including stock options!) of the top 1,000 earners. Many of these people will be genuine wealth creators who have founded innovative companies or created new products or even whole new technologies. Imagine if President Obama was to say that his pay should be pegged to what Steve Jobs,Mark Zuckerberg or Larry Page earned in any year. I cannot say for certain what reception he would receive but I suspect that it would be universal derision.

A question I would like to see the PM answer is,

“How many of the top 1,000 earners are CEOs or top management of government-or NTUC-linked companies or civil servants?”

Since the government sets the salaries of those in the public sector we seem to have an inbuilt mechanism for rampant pay inflation of public-sector managers. The latter are already overpaid compared to their counterparts in the private sector (particularly when job security and pensions are taken into account).

In any case this government should not pretend that it wants talented people to step forward and enter politics. For fifty years they have taken the harshest steps to raise the barriers to entry to politics for Singaporeans and to ensure that those who dared to have different ideas paid an enormous financial and personal cost. In the past they detained people, often for longer than a murderer would receive. When this became difficult after the fall of Communism, they switched to using defamation suits to bankrupt their opponents. Whether justified or not, there is still a perception in most Singaporean’s minds, reinforced by the government’s stifling control over the domestic economy, that standing for an Opposition party or even being a member of one is the kiss of death to one’s career prospects.

In the realm of ideas, the Newspaper and Printing Presses Act and total control of the media ensure that views which do not accord with the ruling party or even the approved Opposition do not get aired. The same restrictions apply to debates and forums. Requirements that political parties register their websites and apply for annual newspaper licences reinforce this. Even in the new social media, the state-run media, aided by their monopoly profits elsewhere, have established a dominant presence and a well-funded and staffed clandestine internet brigade ensures that those who have dissenting views are subjected to the internet equivalent of being shouted down. While this would be fine if there was genuine freedom of expression the fact is that the right of reply is not established anywhere.

The government has never believed that competition is the best way to ensure that we do get the top talent.  Even in the narrow field of electoral competition the government behaves like the convoy system in WWII. In order to cross open seas the smaller weaker vessels were put in the centre and surrounded by battleships and destroyers on the outside. The GRC system allows unelectable newbies, speaking with the voices of entitlement and privilege (Tin Pei Ling, Janil Puthucheary) to shelter beneath the big guns of Ministers and Ministers of State and pass untested into Parliament. Until the last election more than 50% of them could expect to do this without even the formality of an electoral contest. No wonder Grace protested.

I believe the PM is substituting the question of “How do I get the best people to come forward” which is difficult to answer with the easier question of,

“How do I get people to come forward who will be loyal yes-men (or women) and not have any views of their own?”

Perhaps the PM is not totally cynical and actually believes he is answering the first question when in fact he is answering the second. He is himself a victim of brainwashing and cannot see that he is confusingSingapore’s interests with those of the PAP. Knowing that loyalty rather than talent is the real objective of the pay system also helps to explain some of the puzzling remarks that have been made by people like Grace Fu. In business people generally want to be compensated for towing the company line and stifling their own creativity and originality. Giving Grace Fu the benefit of the doubt perhaps that is what she meant when she said that cutting the pay of ministers any further might induce her to rethink her commitment to politics. Or her comments may be indicative of cracks within the PAP. Was this a warning shot across the bows? A warning that she didn’t get into this for the good of the country and that if she is not even to be compensated adequately for her loss of privacy, (and the 1,400 negative Facebook comments)  then don’t be too confident on her continued support in the future.

We must ask, would it be so bad if all the Chan Chun Sings and Tin Pei Lings of Singapore were forced to contest in a free and fair election, one candidate per ward, and the majority of them lost their seats. Well normally in a democracy that wouldn’t be a tragedy or a national disaster because equally talented people would be sitting across the hall in team B waiting to serve. It is the PAP’s 50 years of squashing alternative views that has brought us to the current situation.

So PM please drop the sanctimonious humbug about (obscenely) high pay being necessary to induce good people to come forward. If you are genuinely interested in the widest possible talent pool and the best people (whether in the PAP or an alternative government) then you would adopt the following steps (these are just a few of the many suggestions) before paying your ministers top salaries:

• Abolish restrictions on freedom of expression
• Dismantle the Newspaper and Printing presses Act
• Abolish the ISA
• Abolish the GRC system
• Reform the defamation laws
• Remove race from our IC cards
• Raise the status and profile of the Opposition by creating the title of Leader of the Opposition and paying that person like a minister (as is the practice in the UK and other countries) Give Opposition parties working budgets and office space.
• Broaden access and funding for scholarships but restrict the monetary component to students from lower-income groups while eliminating the requirement to be bonded. This would reduce “groupthink” while promoting equality of opportunity and hopefully lessening income inequality as well.
• Support open debate and free thinking. Encourage and support a culture of diversity of views.

Only after that can we start to examine how our pay structure can support talent once it has been identified and nurtured. Then we can start looking at the big questions such as, What is Singapore? What do we want it to be?

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam