Thursday, April 21, 2011

PAP's greed examined

Source: $800 for us, millions for themselves
John Tan

There has been much publicity in the media about the so called “growth dividend” in the recent Budget presented which hands out up to $800 to every voter. This handout amounts to $1.5 billion in total.

What followed was a torrent of propaganda to convince the people that the giveaways were generous and, to quote by Finance Minister Tharman Shanmugaratnam, “more than what is required for lower- and middle-income households to tide over this temporary period of high inflation.”
But while the handouts are for us to tide over the high inflation we are facing (which are in fact inadequate), the Ministers are more than generous when it comes to their own handouts.

It looks like they are paying themselves an 8-month bonus. This payment is given in addition to their basic salaries, the Annual Wage Supplement (AWS, the 13th month payment) and their Performance Bonuses (PB).

Let us look at the way a minister’s pay is computed: The number of months for items 6 and 8 (see Table below) have been determined and made public.

The PB, item 9, which can range between zero and 14 months of the salary, is a secretive component of the ministerial pay. It is determined solely by the Prime Minister and kept confidential as admitted by Foreign Minister George Yeo here.

In August 2009, the SDP wrote to the Public Service Division twice (see here and here) to inquire about the ministers’ performance bonuses, but was given evasive answers.

In a parliamentary session in January 2009, Minister Teo Chee Hean said that senior civil servant at the MR4 level (which includes junior ministers) received 9 months worth of PB in 2008. Now, the GDP growth in 2007 was 8.8%. The 8.8% growth must have been one of the indicators, if not the indicator, for the PB computation.

[ My comment:

The following is the summary of a MR4 grade Civil servant payment in 2006 and 2007.

In 2006 base salary was S$42,790 a month; however the total annual compensation was S$1.2 million dollars. That was 28 times their monthly pay.

In 2007 base salary was S$52,420 a month, which is already S$10,000 higher compared to 2006. Their total annual compensation was S$1.59 million dollars. That was 30 times their monthly base pay in 2007.

That is to say, a top civil servant is paid about S$6,100 every working day in 2007.

This year the bonus is about 8 months, estimates is good that they will be paid S$7,000 a day in work year 2011.   ]

Last year GDP growth was 14.5%, a much higher rate than 2007. It is likely that the Prime Minister will heap on his and the ministers'  platters a 14-month PB compared to the 9 months they received in 2008.

Nevertheless, I shall use a more conservative estimate of 10 months for the PB. I shall also use a more conservative estimate of 1 month for the SVP.

As you can see this gives each minister a whopping pay of 36.5 months for 2011!

In 2007, an MR4 officer received a basic monthly salary of $52,420. On top of that they were given another 18.4 months of bonuses pulling up their salaries to $1,593,500! That year, the Prime Minister received a total $3.09 million.

In 2008, their monthly salary was increased by 14%, making an MR4 officer’s basic monthly salary $60,000 and the Prime Minister’s $116,000. Tag on the multi-month bonuses and their annual wages again come up in the millions.

Based on this calculation, it is safe to assume that the annual salaries for ministers have not changed. A junior minister would get $2.19 million and the Prime Minister $4.23 million. This works out to about $360,000 a month in wages for Mr Lee Hsien Loong!

It was announced that Parliament had adjusted the President’s salary to S$4,267,500 for this year, confirming that my calculation is fairly close since the Prime Minister’s salary typically trails the President’s marginally.

Given this range, it is reasonable to assume that the average wage of a cabinet minister is about $3 million. Multiply it by 21 ministers in the cabinet and we are paying $63 million for the ministerial salaries.

This is 5.5% of the nation’s entire growth dividend.

It means that a minister like Dr Vivian Balakrishnan, despite blowing the YOG budget by over 3 times its original budget of $104 million and running an event that was riddled with incompetence and mismanagement, will still be paid about $3 million.

It is no wonder they are so pleased with the Budget. It is no wonder Mr Lim Swee Say said he feels so rich whenever he looks at his CPF statement.

In the meantime we get the crumbs that fall from their table while they feast.

In our Shadow Budget 2011, the SDP calls for ministers' salaries to be pegged to the national median income and not GDP, and with the Prime Minister’s pay pegged at 30 times the median salary.

Our proposal is already generous by any standard. With our formula, the Prime Minister would still be getting a salary of about $720,000 per annum, which is still about 30 percent more than what the President of the United States makes.

Currently our PM Lee pays himself 8 times what President Obama gets!

It is time to stop the PAP from partying with our money.

1 Annual Salary Components for MR4 Grade
2 Speech by Deputy Prime Minister Teo Chee Hean3 Ibid
4 Ibid
5 Notice Paper No. 6 of 2009

See related article: Hard truths about ministerial wages

John Tan is SDP's Assistant Secretary-General.

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