So how much should Ministers be paid?

There has been a lot of talk recently about Ministers' pay following remarks made by PM at his swearing-in ceremony on 21 May. This issue has been hot on voter's minds at the recent Elections and is undoubtedly one of the issues high on the agenda for the Government and the PAP. Are our Ministers really paid too much? Is there no justification for them earning millions of dollars each year?

The argument put forward by the Government is that a higher pay would attract the best brains in the country and the private sector by pegging Ministers' pay to the top earners in the private sector. The second reason is that if Ministers are paid well, they are less likely to be corrupted. How true then is this argument and do the figures really tally?

I have a couple of points to make on the argument above. First, private sector salaries are not fixed and rather they fluctuate with economic conditions and companies performance. For example, the Report on Wages in Singapore published by MOM revealed that wages in 2009 fell from 2008 in light of the global economic slowdown. In fact, if one were to look at the 20-year wage change series given in the report, private sector salaries have been anything but constant, with real total wages falling by as much as 6% over the last decade. A junior minister in Cabinet makes over $1 million a year. How then are we to know the 'opportunity cost' for the junior minister if he were to take up a job in the private sector? Even with today's burgeoning corporate salaries, $1 million a year is a tough call.

My second point is this: are such high salaries required to prevent corruption? According to Transparency International Corruption Perception Index for 2010, Singapore ranks joint first globally along with Denmark and New Zealand. Finland and Sweden follow behind joint fourth. Nevertheless, the salaries of Ministers in these countries are significantly lower than what we pay our Ministers in Singapore. According to an article in the Economist, Ministers in New Zealand are paid just over US$270,000. Is there a reason why these countries have been able to stay incorruptible with such relatively low levels of wages for politicians?

The magic formula for Ministers' salaries in Singapore is elusive in my view. The current approach surely needs rethinking. It needs to be one that is more in touch with people's earning capacity today, one that is reflective of Ministers' performance and citizens' satisfaction with the Government. Of course it is easy to pen these suggestions but actually getting around to implementing it is another thing.