Singapore ministers set for million-dollar pay hike

SINGAPORE Thu Apr 5, 2007 2:51pm EDT

Singapore's Prime Minister Lee Hsien Loong smiles as he speaks to Reuters on the sidelines of 12th Association of Southeast Asian Nations (ASEAN) Summit in Cebu in this file photo from January 14, 2007. REUTERS/Bazuki Muhammad

Singapore's Prime Minister Lee Hsien Loong smiles as he speaks to Reuters on the sidelines of 12th Association of Southeast Asian Nations (ASEAN) Summit in Cebu in this file photo from January 14, 2007.

Credit: Reuters/Bazuki Muhammad

SINGAPORE (Reuters) - The salary of the prime minister of Singapore is more than three times that of U.S. President George Bush and about four times that of Japan's Prime Minister Shinzo Abe. But that is not enough.

Singapore's Prime Minister Lee Hsien Loong may soon be getting a hefty pay rise as part of a controversial ministerial salary hike that has infuriated many Singaporeans.

Lee, who is estimated to earn about S$2 million (669,265 pounds) per year, said last month that the salaries of Singapore ministers, top public officials and judges have fallen way below benchmark private sector salaries and may need to be doubled.

"It is critical for us to keep these salaries competitive, so as to be able to bring in a continuing flow of able and successful people," Lee said in a speech in March.

Lee said that Singapore ministers, who currently earn about S$1.2 million a year, should be earning S$2.2 million. Details of the new ministerial salaries will be announced in parliament on April 9.

Since 1994, the salaries of Singapore ministers have been set at two-thirds the median pay of the 48 best-paid bankers, lawyers, accountants, engineers, and executives in multi-nationals and manufacturing firms.

But the latest salary hike, which comes at a time when income disparity in Singapore is wider than ever, has sparked an outpour of unusually blunt criticism from Singaporeans.

Hundreds have signed an online petition and the readers' letter columns of the state-controlled newspapers -- one of the few outlets for dissenting views in the city-state -- have published a series of letters protesting the planned hike.

"GOVERNMENT ALWAYS WINS"

Some Singaporeans argue that the six lucrative professions on which ministers' salaries are based do not reflect the country's economy or the government's performance.

"No matter what happens to the economy, the government always wins because it takes only the best results," Jacob Tan said in a letter to the Straits Times.

And given that a 2 percentage point rise in sales tax from July will further hit the poor, some said the government plan is tactless.

"I am rather disappointed with the government's insensitivity," reader Vanessa Teo said.

But the sharpest criticism was online. The "awesome raise on top of their already obscene pay is completely unjustifiable," read an online petition that has gathered 304 signatures.

Given the rare public outcry, analysts said the government may now hesitate to raise salaries by the full S$1 million.

"I would be surprised if they implemented the full formula that would give them over S$2 million," said Garry Rodan, director of the Asia Research Centre at Murdoch University.

The government defends the high salaries as necessary to attract the brightest people and to prevent corruption.

"If we don't do that ... corruption will set in and we will become like many other countries," Defence Minister Teo Chee Hean was quoted as saying in the Straits Times last week.

Singapore government officials' salaries are set by different wage formulas, depending on their seniority. The figures are not readily available to the public, but the prime minister earned S$1.94 million in 2000, according to the Straits Times.

Ministers' wages were last raised in 2000, but were cut in 2001 and 2003 during the economic downturn, although the cuts have since been reversed, the Public Service Division said.

"ABLE GENERALS"

Some argue that Singapore ministers are not overpaid, but that ministers elsewhere are underpaid.

Singapore is an oasis of wealth, peace and law and order in a region rife with poverty, violence and corruption.

The island state is Asia's second-richest country after Japan, with a gross domestic product per capita of about $31,000 (15,695 pounds).

The World Economic Forum ranks Singapore as the fifth-most competitive of 125 economies in 2006, while Transparency International said the city-state was the fifth-most corruption-free nation out of 163. Isn't that worth a price?

"According to a Chinese proverb, an able general is worth more than 10,000 foot soldiers. So too is the worth of our leaders if they have the wisdom to help us weather global competition," reader Yik Keng Yeong said.

But critics say that the prosperity and security enjoyed by Singaporeans are not that different from other Asian first-world economies such as Japan, Korea and Taiwan, where government ministers do not command such high salaries.

Finland, for instance, beat Singapore in the WEF and Transparency International polls -- as second-most competitive and most corruption-free country -- but its Prime Minister Matti Vanhanen earns about a sixth of Lee's estimated salary.

What irks Singapore's opposition parties is that the million-dollar salaries are only accessible to members of Lee's ruling People's Action Party. Opposition politicians have been crippled by defamation lawsuits brought by government ministers and no opposition party has ever held a ministerial post.

The opposition also argues that a million-dollar pay hike is unwarranted for leaders of a country that has no legal minimum wage and where 20 percent of the population earns an average monthly salary of S$1,500.

But Lee Kuan Yew -- modern Singapore's first prime minister, who is still the leading voice in his son's cabinet -- will have none of it.

"The cure to all this talk is really a good dose of incompetent government," Lee senior told the Straits Times on Thursday, adding that it is "absurd" for Singaporeans to quarrel about ministerial pay and warning that Singapore would suffer it the government could not pay competitive salaries.

"Your security will be at risk and our women will become maids in other people's countries," he said.

(Additional reporting by Sakari Suoninen in Helsinki, Isabel Reynolds in Tokyo, Joanne Allen in Washington)